Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

MESSAGE FROM THE QUEEN

The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's answer to the Address, as follows:

I have received your Address praying that I will give directions for the presentation on behalf of your House of a Mace to the National Assembly of Uganda, and assuring me that you will make good the expenses attending the same.

It gave me the greatest pleasure to learn that your House desires to make such a presentation and I will gladly give directions for carrying your proposal into effect.

NEW WRIT

For Faversham, in the room of Percy Lawrence Wells, esquire, deceased. —[Mr. Bowden.]

PRIVATE BUSINESS

BRITISH RAILWAYS BILL

TEES CONSERVANCY BILL

Lords Amendments considered and agreed to.

BEDFORD CORPORATION BILL

SAINT GEORGE HANOVER SQUARE BURIAL GROUND BILL

Read the Third time and passed.

LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [Lords]

Read a Second time and committed.

CHURCH OF ENGLAND (NATIONAL ASSEMBLY) (MEASURES)

Clergy (Ministration to Non-Resident Electors) Measure 1964, withdrawn.

Oral Answers to Questions — NATIONAL FINANCE

Civil Service and Private Industry

Mr. P. Williams: asked the Chancellor of the Exchequer on how many occasions members of the Civil Service have been attached to private industry for a limited period to gain wider experience of industrial and scientific matters; and how many members of private industry have been temporarily attached to the Civil Service.

The Chancellor of the Exchequer (Mr. Reginald Maudling): During 1961–63 inclusive, 32 members of the home Civil Service of various classes and grades were attached for periods of one month or more to private industry and commerce. Seventy-four people from these fields were attached temporarily to the home Civil Service.

Mr. Williams: While welcoming these figures, may I ask my right hon. Friend whether he is aware that they still appear to be rather low? We as a nation really need to break away from the attitude which so often seems to inhibit the Civil Service that it will not touch anything tainted with trade, and, similarly, in free enterprise there are a lot of people who seem to think it is dangerous to be polluted with a public service. Cross-fertilisation in this field would be absolutely invaluable. Would not my right hon. Friend consider initiating discussions with, say, the National Union of Manufacturers and the Trades Union Congress to see how this can be achieved?

Mr. Maudling: I agree very much with my hon. Friend on the principle involved. It is, in practice, difficult to fit people in, for a limited period, either to big business or a Government Department, but I am sure that we should press on with this as much as we can.

Profits and Earned Incomes

Dr. Bray: asked the Chancellor of the Exchequer by how much profits and earned incomes, respectively, have increased since this time last year.

Mr. Maudling: I regret that figures for the first quarter of 1964 are not yet available. Even when they are known, comparisons with the corresponding quarter of 1963 would be misleading because of the exceptionally severe weather at the beginning of last year. The figures for the last quarter of 1963 were published with a commentary in the Economic Report, 1963.

Dr. Bray: Is the Chancellor aware that, quite apart from the first quarter, 235 companies declared their results in April, and this week the Economist reported that their profits show an increase of over 15 per cent. on last year? [HON. MEMBERS: "Hear, hear."] Does the right hon. Gentleman really think that with profits increasing like this, and with no step on the part of the Government to introduce any control of profits by a Profits Tax, we have a firm basis for an incomes policy?

Mr. Maudling: I think that this is the misunderstanding. One must look at profits over a period of years, because they fluctuate in both directions. In 1961–62, when they were falling, it was not then suggested, I think, that we should reduce taxation.

Mr. Peter Emery: Does not my right hon. Friend agree that it is not only 1961–62, but that since 1958 industrial profits have fallen as a unit from a position of about 15 to 8? Would it not, therefore, be completely understandable that industry should attempt to get back to the level of profitability it knew in 1959?

Mr. Maudling: It all shows that much depends on the base year one takes, but the simple fact is that one must assume that sometimes profits should rise faster than wages because, at others, they are falling when wages are going up.

Speculative Gains Tax

Dr. Bray: asked the Chancellor of the Exchequer how much speculative gains tax has now been collected.

The Financial Secretary to the Treasury (Mr. Alan Green): I regret that this figure is not available.

Dr. Bray: Is it not available, or is it zero?

Mr. Green: I think that the hon. Member heard my reply; I said that it was not available.

Mr. Houghton: May I ask whether the hon. Gentleman will disclose to the House the figures he has? Surely he has some information—cannot it be disclosed to the House, with whatever qualifications and reservations may be needed?

Mr. Green: I am answering the Question on the Order Paper. If the hon. Gentleman wishes to put down another Question, I shall be delighted to try to answer it.

Sir C. Osborne: In this context, are football pool winnings regarded as speculative gains? Is, it not a fact that if a savage and vindictive tax were imposed, the tendency would be to dry up all forms of savings?

Mr. Green: I am afraid that I have to give my hon. Friend the same reply as I gave the hon. Member for Sowerby (Mr. Houghton).

Mr. Callaghan: Does the Financial Secretary's reply mean that he is unable to give the House any guidance at all about the amount of the speculative gains tax, or is he, in fact, concealing information that would enable him to give some information to the House?

Mr. Green: This matter, as the hon. Gentleman knows quite well, has been explored on a number of occasions already and, of course, I do not object at all to further exploration. The hon. Gentleman knows quite well, because the reasons have been given, why it is not possible at this time to give in precise terms anything other than a misleading reply, and it I am afraid that I do not choose to give a misleading reply. Of course, it would be possible to speculate about the size of this tax, but I do not happen to want to speculate about it.

Government Departments and Public Bodies, Northern Ireland

Mr. Stratton Mills: asked the Chancellor of the Exchequer whether Government Departments and public bodies are situate in Northern Ireland, other than those used for local administration; and if he will state the total number of persons employed.

Mr. Green: All the Government offices and public bodies in Northern Ireland are concerned in some way with local matters. There are no dispersed offices there.

Mr. Stratton Mills: Is my hon. Friend satisfied with this position?

Mr. Green: As I think my hon. Friend knows, we always keep under real review the possibility of getting some central Government work into Northern Ireland, and this we will certainly go on doing. I regret very much that it has not yet been possible to do it.

Mr. Stratton Mills: asked the Chancellor of the Exchequer if he will inform the Government of Northern Ireland when Government Departments and public bodies are considering transferring offices to, or opening offices in, new locations as part of the Government policy on distribution of offices.

Mr. Green: The Treasury was in close touch with the Government of Northern Ireland at the time of Sir Gilbert Flemming's dispersal inquiry last year. We have the situation there well in mind and will certainly inform them whenever there might be prospects of moving Government work, or opening new Government offices, there.

Bank Notes (Disposal)

Mr. Dempsey: asked the Chancellor of the Exchequer what decisions have now been reached about methods of disposing of redundant bank notes in Scotland and the provinces instead of sending them to London for pulping.

Mr. Maudling: Responsibility, so far as Bank of England notes are concerned, lies with the Bank of England, which advises me that local destruction by it would not appreciably increase security, and would be less efficient and more costly than the existing system.

Mr. Dempsey: Would not the Chancellor agree that this project is worth considering as, in view of recent experience, there is no guarantee that these types of redundant notes ever reach the south of England? Is it not the case that there was at one time a disposal unit operating in the City of Glasgow, and would he not agree that

if there were one now it would provide additional employment in Scotland?

Mr. Maudling: I do not think that it would necessarily be the type of additional employment in Scotland that one would aim at. Bank notes cannot be destroyed until they have been examined by the Bank of England. Any notes coming to the provincial offices of the Bank of England are defaced before being sent to London for destruction.

Sir G. Nicholson: Is there any case known in history of a Scotsman destroying a bank note? [Laughter.]

Property, Liverpool (Rateable Values)

Mr. A. J. Irvine: asked the Chancellor of the Exchequer how many applications have been received from landlords by the valuation office in Liverpool in the last 12 months for an increase in the rateable value of their properties.

Mr. Green: About 150.

Mr. Irvine: Is the Financial Secretary aware that it is being said on Merseyside that landlords are doing this because they want to avoid rent re-control, which is regarded as a likely occurrence in the near future? Will he indicate how he regards applications made for this purpose?

Mr. Green: I do not think that there should be fears on this matter, because whether the rent of the building is controlled depends on its value in the rating valuation list on 7th November, 1956, and cannot, therefore, be affected by what is suggested.

International Airports (Duty-Free Shops)

Mr. David James: asked the Chancellor of the Exchequer if he will authorise the installation of duty-free shops in the incoming, as well as the outgoing, lounges of international airports in the United Kingdom.

Mr. Maudling: No, Sir.

Mr. James: Is my right hon. Friend aware that this proposal would, first of all, prevent aircraft from flying out with their bellies filled with cigarettes, scent and spirits for sale on the way home; that it would beguile passengers awaiting


the Customs, and that it would assist airlines like British European Airways which do not seem to have as much time to sell duty-free goods to their passengers as do other airlines?

Mr. Maudling: It is an interesting and novel proposal, but there is no real analogy with the duty-free shops for outgoing passengers, whose purpose is to assist exports by getting people to buy our goods and take them away. As for the carriage of these goods on aircraft, I have, in my Budget, made some advances in the matter.

Mr. James: But does not my right hon. Friend agree that Scotch whisky, for example, sold to incoming Finns is as valuable as it is when sold at London Airport to outgoing passengers?

Mr. Maudling: I would rather take the duty as well as the price.

Public Service Pensions

Mrs. Castle: asked the Chancellor of the Exchequer whether he will review public service pensions in order to make the necessary adjustments to meet the increase in the cost of living since the last review in the Pensions (Increase) Act of 1962.

Mr. Green: I have nothing to add to the replies which my right hon. Friend the Chief Secretary gave to my hon. Friend the Member for Tynemouth (Dame Irene Ward) on 5th May.

Mrs. Castle: Is the Financial Secretary aware that the cost of living has risen by 2½ per cent. since the last increase was put on these pensions? Does not he agree that the least we can do for former members of the police force, or other public service pensioners, is to see that there is a regular annual review of their pensions so that they do not suffer an actual reduction in their standard of living?

Mr. Green: These are very difficult matters and they are constantly under review, as the hon. Lady knows. It is true, of course, that the increase in the last Pensions (Increase) Act very substantially exceeds any subsequent increase in the cost of living.

Dame Irene Ward: In view of the Answer I was given on the last occasion,

can my hon. Friend tell me whether he has now considered the problem of the increase in the price of coal? The problem is that these people do not have a place to store coal in the summer, and will therefore have to pay highly increased winter prices. What is the answer to that?

Mr. Green: I am afraid that I cannot give my hon. Friend the answer off the cuff because, in fact, my right hon. Friend is considering the matter now.

Mr. Callaghan: Does not the Financial Secretary think that it is time that the Government took into account the growing arrangements existing in the public services and elsewhere for a regular review of remuneration? Is he aware that there is a strong and growing feeling that there should be a similar arrangement for a regular review of the pensions of public servants? Would he please undertake to examine that possibility, and give the House a report?

Mr. Green: This subject has been discussed on previous occasions in this House, of course, and I do not think that I can add to the previous answers that have been given. Apart from anything else, hon. Members on both sides make quite sure that this kind of issue does not escape notice.

Mr. Callaghan: Does not the hon. Gentleman realise that there is a growing feeling that hon. Members should not have to importune Ministers on this sort of matter every time? While the hon. Gentleman says that there have been discussions in the past, may I ask him the specific question whether the Government are going into the matter now to see whether there can be a regular review of public service pensions at fixed intervals as in the case of other public service remuneration?

Mr. Green: This has been debated many times in the past. No entirely satisfactory form of review machinery has yet been devised, as my right hon. Friend the Chief Secretary to the Treasury has already informed the House. It does not follow that because one has a regular reviewing machinery pensioners are necessarily better off. It depends upon the terms under which we have that review, and this is one of the matters which are being considered.

Technical Costs Officers

Mr. Dalyell: asked the Chancellor of the Exchequer what steps he is taking to train technical costs officers for service in all branches of the Civil Service.

Mr. Green: None, Sir. As the Prime Minister indicated in his reply to the hon. Member's Question on 5th March, the two main employing Departments, Ministry of Aviation and the Post Office, already have training arrangements to supplement—where necessary—the pre-entry qualifications and experience of their technical costs officers.

Mr. Dalyell: Is not this, in the light of the Bloodhound episode, a rather complacent view of the situation?

Mr. Green: I trust not, but among other things we want to make as sure as possible that we have the training arrangements right. Sir John Lang has been asked to look at this as well. If he has recommendations to make they will certainly be considered.

Temporary Civil Servants (Pensions)

Dame Irene Ward: asked the Chancellor of the Exchequer how many temporary civil servants are involved in the new settlement for pensions; and what is the estimated cost.

Mr. Maudling: About 600 temporary civil servants should benefit from this scheme immediately and about a further 7,500 could do so over the next 15 years.
It is impossible to estimate the cost precisely but it will be well under £1 million a year at the period of greatest expenditure.

Dame Irene Ward: Will my right hon. Friend accept my thanks for this rather belated decision? As this is one of the concessions which my right hon. and learned Friend the Member for Chertsey (Sir L. Heald), my hon. Friend the Member for Bath (Sir J. Pitman) and myself and other hon. Members have been pressing on successive Chancellors of the Exchequer for years, can my right hon. Friend say why when the announcement is made he should not point out that this is an obligation now accepted by Her Majesty's Government which was refused by a Socialist Government?

Mr. Maudling: My hon. Friend has been extremely active in these matters and I know that all concerned will be grateful to her for the support which she has given. We go on progressively under Conservative Governments improving things year by year.

Mr. Houghton: Is the right hon. Gentleman aware that while this settlement is very welcome indeed though belated, as the hon. Lady the Member for Tynemouth (Dame Irene Ward) has just said, nevertheless, in giving credit for past service the handicap of counting only half unestablished service for pension is still retained in this settlement for all service up to July, 1949? Will the right hon. Gentleman take steps to remedy that signal omission from the agreement?

Mr. Maudling: As the hon. Member knows, that is part of a very much wider question.

Captain Elliot: Will my right hon. Friend bear in mind that there will be a certain number of temporary civil servants who missed the deadline by a few days or a few weeks? Will he treat their cases sympathetically?

Mr. Maudling: I appreciate that this is always the trouble in introducing new arrangements. One has to draw a line somewhere and somebody is bound to get on the wrong side of it. I cannot see a solution to that problem.

Handicapped Persons (Income Tax)

Mr. Hannan: asked the Chancellor of the Exchequer if he will give an approximate estimate of the cost of making an Income Tax concession in favour of the physically and mentally handicapped and for incontinent patients for renewal of clothing limited to a maximum of £20 per year.

Mr. Green: I regret that I cannot provide an estimate of the cost.

Mr. Hannan: While appreciating the hon. Gentleman's difficulty in this matter, may I ask whether he does not agree that this type of patient suffers financial hardship in respect of the extra cost of wearing apparel and bedclothes? Will he ask his right hon. Friend to give


this matter earnest and serious consideration before the Committee stage of the Finance Bill?

Mr. Green: I am sure that my right hon. Friend, sitting next to me, has heard what has been said. I know that the hon. Member will appreciate that however sympathetic one may be, and ought to be, with these cases of disability, it is frightfully difficult to draw the line and to be sure that one has drawn it at a point where one can keep it without being unfair to other people who may be similarly circumstanced.

London Opera Centre

Mr. Pavitt: asked the Chancellor of the Exchequer what proportion of the total grant to the Arts Council was allocated to the London Opera Centre.

Mr. Maudling: 0·3 per cent. in 1962–63, 0·8 per cent. in 1963–64 and just under 1 per cent. in 1964–65.
I should like to take this opportunity to apologise for and correct an error in the reply given by my hon. Friend the Economic Secretary on 5th May. The amount provided by the Arts Council for the London Opera Centre up to 31st March, 1964, was not £24,000, but £29,500.

Mr. Pavitt: I am grateful for the correction which the right hon. Gentleman has made. Is he aware that at the present time there is considerable public concern about the policy at the London Opera Centre and that only three days ago seven members of the staff resigned? In the light of this, when making future allocations will the right hon. Gentleman review the whole question of policy in respect of that Centre?

Mr. Maudling: I am aware that there is considerable concern about this matter, but I feel that when one gives people, like the Arts Council and other important bodies, responsibility for policy one must leave them to carry it out. As long as one has confidence in them, as I have—

Dame Irene Ward: But I have not.

Mr. Maudling: —one must leave them to do their job.

Mr. Pavitt: asked the Chancellor of the Exchequer what information he

has obtained about the total cost of advertisements for the post of a new director of the London Opera Centre, and about the number and nationality of the applicants.

Mr. Maudling: The post was not advertised and no applications were received.

Mr. Pavitt: Does not this indicate that there is still something radically wrong with the policy when a post of this importance is not advertised? Would it not have been more appropriate to seek someone of standing in the musical world, such as Sir Adrian Boult, in competition with others to make sure that public money is spent in the best possible way? Whilst not wanting to interfere with the stand that the right hon. Gentleman has made about the Arts Council having the right to run its own affairs, may I ask whether it is not his responsibility to act as the taxpayer's watchdog in these matters?

Mr. Maudling: This was a matter for the Board of the London Opera Centre. I understood that it took the view that advertisement was unnecessary because in this specialist field the suitable candidates were known to it. Once again, I must emphasise that if we give people responsibility it is a pity to interfere with them in their exercise of that responsibility.

Sir T. Moore: On a point of order, Mr. Speaker. Is it in order for an hon. Member to put his Question when seated?

Mr. Speaker: One ought to observe the fact that there are amplifiers in the back of the seats. Subject to that difficulty, one effects as much rising in one's position as one can.

Mr. Pavitt: On a point of order, Mr. Speaker. May I seek your guidance? I am satisfied with the answers that I have received from the right hon. Gentleman on this matter; yet I want to take the matter further concerning the London Opera Centre. Therefore, without wishing to be discourteous to the right hon. Gentleman, may I ask whether I am entitled to ask for an Adjournment debate in spite of the fact that the right hon. Gentleman has dealt fully with my Questions?

Mr. Speaker: The hon. Gentleman must decide whether or not he wishes to give oral notice. I will treat it as though he had.

The Arts

Dame Irene Ward: asked the Chancellor of the Exchequer whether he will advise the appointment of a Royal Commission to examine the most effective way of helping the arts.

Mr. Maudling: No, Sir.

Dame Irene Ward: Is my right hon. Friend aware that when there is a genuine industrial dispute, Ministers and trade unionists and conciliation officers and almost everybody else are called in to try and bring the parties together? Presumably my right hon. Friend has confidence in the trade unions and in his right hon. Friend the Minister of Labour. Can my right hon. Friend therefore explain why when there is a professional argument, and two good women of great integrity on the staff wish to protect the interests of the taxpayer and the taxpayers' money, my right hon. Friend should decline to intervene in what I think is a most sickening process? I hope that the whole thing will be blown sky-high before long.

Mr. Maudling: I cannot share my hon. Friend's sentiments on this point. These are matters which must be sorted out by the Arts Council if it is carrying out its responsibilities, which I think it is doing very well.

Dame Irene Ward: Nonsense.

Hire-Purchase Agreements (Tax Relief)

Mr. Hendry: asked the Chancellor of the Exchequer what is the anticipated loss to the revenue in a full year as a result of the tax relief schemes now being offered by hire purchase companies which have the effect of giving tax relief in respect of interest on hire-purchase agreements.

Mr. Green: This will depend on how widely the schemes are adopted.

Mr. Hendry: Does my hon. Friend think that the Hire-Purchase Bill which is at present before Parliament will stop

up this loophole? If not, what other steps does he propose to take to do so?

Mr. Green: The best thing that I can say to my hon. Friend is that I have noted his suggestion. I will certainly consider it, but I have to say to him that at first sight I am not too sure that I can justify adopting it.

Mr. Callaghan: Is not it an interesting example of unconscious bias that the hon. Member for Aberdeenshire, West (Mr. Hendry) should want to stop tax relief on hire-purchase payments when no doubt he and other people have managed to get tax relief on their bank interest payments year after year?

Mr. Green: I suppose that there are two forms of bias to be disclosed across the Floor of the House.

Economic Policy

Mr. Warbey: asked the Chancellor of the Exchequer which Government Department is responsible for the forward planning of external economic policy.

Mr. Maudling: This responsibility rests with the Treasury, in consultation with other Departments concerned.

Mr. Warbey: Can the right hon. Gentleman say, in particular, how the Foreign Office is drawn into the picture and who is responsible for carrying out policy and for negotiating with foreign Governments at international economic conferences such as G.A.T.T. and the Geneva Conference on Trade and Development? Who is responsible for bringing the foreign policy of this country towards countries like China in line with external economic policy?

Mr. Maudling: Obviously it varies in different cases. Primary responsibility for the forward planning of external economic policy rests with the Treasury, but of course the Foreign Office, the Board of Trade and others are consulted. Responsibilities for conducting negotiations also vary. For example, in G.A.T.T. they normally rest with the Board of Trade, and in the World Bank and the International Monetary Fund they rest with the Treasury. It depends upon the nature of the negotiations.

Missiles (Expenditure)

Mr. Emrys Hughes: asked the Chancellor of the Exchequer, in view of the amount of money paid to Messrs. Ferranti for the Bloodhound missile, what further steps he will take to scrutinise and supervise such expenditure in future.

Mr. Green: I would refer the hon. Member to the Answer I gave to the hon. Member for Wednesbury (Mr. Stonehouse) on 11th February.

Mr. Hughes: Can the hon. Gentleman tell us where were the watchdogs of the Treasury when this bloodsucker operation was going on? Does not this show that the Chancellor of the Exchequer and the Treasury, or whoever looks after our finances, has allowed a grave scandal to develop? What is going to be done about it?

Mr. Green: The answer to the substantive question that the hon. Member has put is that the Treasury does not seek—and I believe it would be very bad organisation if it did seek—to handle in detail contracts that are in fact the responsibility of another Department.

Mr. F. Harris: Does my hon. Friend think that hon. Members opposite fully realise that at least 53 per cent. of this money, and possibly up to 78¼ per cent., automatically comes back to the Government by way of taxation?

Roads (Expenditure)

Mr. Wainwright: asked the Chancellor of the Exchequer, if he will give the amounts spent on roads in 1960, 1961, 1962 and 1963, respectively, as percentages of the revenue received from road users by way of fuel tax and licence duty; and if he will give a comparable estimated figure for 1964.

Mr. Green: Public expenditure on roads as a proportion of the yield of road fuel taxes and motor vehicle duties in Great Britain was 52 per cent. in 1960–61, 50 per cent. in 1961–62, 54 per cent. in 1962–63 and 56 per cent. in 1963–64. The estimates for 1964–65 yield a comparable proportion of 57 per cent.

Mr. Wainwright: Does not the hon. Gentleman believe that the Treasury is

taking too big a slice out of the amount of money that is received from motorists? Does not he also agree that congestion on the roads today is costing the economy of the country quite a few hundred million pounds each year? Would not the hon. Gentleman consider making a greater grant to the Ministry of Transport so that more roads can be constructed? So far this year only 7½ miles of motorway will be opened. Does not the right hon. Gentleman agree that more money should be spent on the roads?

Mr. Green: I think that the hon. Gentleman has asked me two separate questions. The revenue from motor vehicle duties, petrol tax and so on paid by the motorist as such goes to the common Exchequer pool. It is not hypothecated—I believe that is the correct term—to a specific purpose. The question whether we should devote more of the total yield of taxes—not just one class of tax—to roads and road services is really a matter for my right hon. Friend, but it does involve the whole balance of investment in this country. I agree that one could have a separate debate on that.

Oral Answers to Questions — WIRELESS AND TELEVISION

I.T.A. (Medical Advertisements)

Mr. Pounder: asked the Postmaster-General if lie will require the Independent Television Authority, under Section 9(2) of the Television Act, 1954, to refrain from broadcasting misleading medical advertising.

The Postmaster-General (Mr. Reginald Bevins): There is already such a duty on the I.T.A., and for some considerable time now it has been the practice for all medical advertisements to be referred to an appropriate consultant for advice before they are broadcast.
The House may like to know that the I.T.A.'s up-to-date code on all their advertising will be published, I hope, early in June; and I will see that copies are placed in the Library.

Mr. Pounder: While thanking my right hon. Friend for that reply, may I ask whether he is not aware of the possible injurious effects and consequences


of encouraging the practice of self-medication? Is my right hon. Friend further aware that several television advertisements can, by implication, lead the viewer to imagine that there is some almost miraculous cure by some lightning revitaliser? Will not he look into the question very thoroughly in case we become a nation of hypochondriacs?

Mr. Bevins: All these advertisements are vetted by an expert medical man, but as from July of this year there will be a full advisory panel of medical and pharmaceutical people who will consider advertisements.

Alexandra Palace

Mrs. Butler: asked the Postmaster-General what discussions he has had with the British Broadcasting Corporation about the continued use of Alexandra Palace for television, and about putting these arrangements on a permanent basis so as to maintain alternative television facilities in the event of a breakdown at the main television centre or in other emergencies.

Mr. Bevins: The maintenance of television services in the event either of a breakdown in any of the B.B.C.'s centres or of other emergencies is a matter for the Corporation rather than for me. The Corporation has, however, told me that it is retaining Alexandra Palace for television news services until 1967 at least.

Mrs. Butler: Since the centre at Alexandra Palace demonstrated its value in the recent black-out at the main television centre, and since the service at Alexandra Palace is to go out of use, I understand, after the date which the right hon. Gentleman mentions, would it not be appropriate for the Postmaster-General to have discussions with the Corporation to ensure that the service there is continued, as this is a matter of national importance and there is great value in having more television centres?

Mr. Bevins: I agree that this is a matter of public importance, but the Corporation's lease of Alexandra Palace expires in 1967 and it will then be for the Corporation, not for me to decide whether it is renewed or not. In this connection, of course, one ought to weigh the

expenditure on a future lease with the risk of a further breakdown, which, on any view, is really rather remote.

Oral Answers to Questions — POST OFFICE

Equipment (Tenders)

Mr. Dempsey: asked the Postmaster-General, in view of the fact that tendering by companies for reservation clause business materially alters the condition of tendering and the risks involved for non-ring manufacturers, what steps he takes to advise non-ring companies that tenders are to be invited from ring companies' subsidiaries; and what further steps he proposes to take.

Mr. Bevins: The whole industry has been well aware of Post Office practice since I answered a Question put to me by the hon. Member for Barnsley (Mr. Mason) on 31st July last, and I do not think that any further steps are necessary.

Mr. Dempsey: Will not the Minister agree that permission to ring subsidiaries to apply for reservation clause business strikes at the very root of giving protection to some firms, especially in the development districts or growth areas in Central Scotland, for example? Is not the right hon. Gentleman aware that, unless some effective steps are taken, we shall have complete monopoly and domination on the part of the ring companies to the detriment of the employment prospects in areas like North Lanarkshire?

Mr. Bevins: No, I do not agree. I see nothing wrong in allowing subsidiaries of the companies which are parties to the bulk supply agreements to tender for reservation clause business. The wider that we can open the field the better it will be.

Mr. Mason: Will the right hon. Gentleman say how many companies, while linked with the ring firms, have received contracts under the reservation clause for exchange equipment and telephone apparatus? In view of the fact that the right hon. Gentleman allows this to happen, does he think that he is getting competitive tendering?

Mr. Bevins: In 1963–64, out of 46 firms invited to tender for telephone apparatus, 11 were subsidiaries of the


agreement firms, and six out of 37 were invited to tender for exchange equipment. I think the prices that the Post Office is currently paying are evidence that this practice is right.

Sir J. Langford-Holt: Did not the Public Accounts Committee recommend that firms outside the ring should be given an opportunity of tendering? Does it not go against this recommendation when subsidiaries of ring firms are considered to be outside the ring? It is nonsensical.

Mr. Bevins: I do not agree with my hon. Friend. What the Public Accounts Committee recommended was that the Post Office should invite tenders from firms outside the agreements. These firms are outside the agreements up to the full limit permitted by the agreements, and this is evidence of determination to widen the field of supply. It is important that the Post Office should observe the practice of making sure that these subsidiaries are effectively independent production units.

Moulton Bicycles

Mr. Proudfoot: asked the Postmaster-General (1) what examination he has made of the advantages of Moulton bicycles in connection with postal delivery services;
(2) how many Moulton bicycles his Department has in use.

The Assistant Postmaster-General (Mr. Ray Mawby): There are no Moulton bicycles in use in the Post Office. I do not think we would be justified in introducing them into our service, for the reasons which I have already explained to my hon. Friend, but we intend to purchase a model for further study.

Mr. Proudfoot: While thanking my hon. Friend for buying at least one of these new bicycles, may I ask him to compare the weight of the Moulton bicycle with the standard model that the Post Office possesses? May I also ask him whether he realises that this is the first advance in cycle design for 80 years? If he were to obtain some more, it might help our exports.

Mr. Mawby: This is the reason we are purchasing a model for further study. But it is important to note that the basic

feature of the Moulton machine is the very small wheels which would obviously be a disadvantage in rural areas on rough tracks. Nevertheless, we are purchasing a model and we shall study it very carefully.

Customs and Excise (Damaged Parcels)

Mr. Shepherd: asked the Postmaster-General on how many occasions during the past five years the Post Office has paid compensation in respect of parcels damaged as a result of inadequate repacking by Customs officials after exam nation in this country; and what representations have been made to Customs and Excise with a view to a higher standard of repacking.

Mr. Mawby: Parcels selected by Customs for examination are unpacked and repacked by Post Office staff. Records of compensation cases in the form referred to by my hon. Friend are not kept, and such records as we have do not, in any case, go back for five years; but I can say that, during the past 12 months, 187 claims for compensation have been paid in respect of damage to incoming parcels said to have resulted from inadequate repacking after Customs examination.

Mr. Shepherd: Is my hon. Friend satisfied that nothing can be done to improve the repacking of these parcels, since it is very disappointing to the recipient of a present to find that it has been damaged as a result of carelessness on the part of the Post Office?

Mr. Mawby: No, I am not satisfied with the position at all. Instructions are given to our staff that they should not disturb the packet more than is absolutely essential and that they should take care to make certain that the package is properly repacked. We shall do everything we possibly can to see that these instructions are properly carried out.

Sir W. Bromley-Davenport: Is it not most unfair to blame the Post Office for this damage? Is it not largely due to British Railways?

Mr. Mawby: It all depends on how the parcel travels. Obviously, at some point it will usually travel on the railways. However, neither the railways


nor we are completely satisfied with the way things are handled and we are doing everything we can to make it better.

Oral Answers to Questions — TELEPHONE SERVICE

Elderly Disabled Persons

Mr. Lipton: asked the Postmaster-General what plans he is making to give free telephones to elderly disabled persons.

Mr. Bevins: While I am sympathetic to the needs of elderly disabled people, I do not think that the provision of free telephones is the best way of meeting these needs.

Mr. Lipton: Since many old and disabled people are completely cut off from contact with the outside world, would it not be a boon if free telephones could be given to them, especially in view of the very generous offer which has been made by members of the Post Office Engineering Union to install and maintain these telephones free of charge in their own spare time?

Mr. Bevins: We have discussed the proposal of the Post Office Engineering Union with the union. What it had in mind was a very limited number of cases of people who were within eligibility for National Assistance. It is the fact, of course, that the National Assistance Board is prepared to help in certain cases in providing money for the provision of a telephone. We have had further talks with the Board and the question is presently under review.

Mr. Mason: Why does not the right hon. Gentleman, having expressed sympathy, conduct a survey to find out how widespread this problem really is and then, after consultation with the Post Office Engineering Union, which is very sympathetic to the idea, try to find out whether it is possible at least to assist with free installation or with rental-free telephones?

Mr. Bevins: The short answer to the hon. Gentleman is that the Government's view is that the right way to help elderly people is by cash payments rather than by free services.

Mr. Costain: Does my right hon. Friend recall that he was proposing to

investigate the possibility of putting in alarm bells for elderly people? Has his Department made any progress in that direction?

Mr. Bevins: This is still under consideration. However, I must say that, once the Post Office departs from its traditional practice of charging for its services, the door is wide open and no one can say where the process might end.

Oral Answers to Questions — TRADE WITH CUBA

Mr. Fernyhough: asked the Prime Minister what conversations he has now had with British shipping lines about their refusal to carry British exports to Cuba.

The Prime Minister (Sir Alec Douglas-Home): None, Sir.

Mr. Fernyhough: Does the Prime Minister recall that in a recent Answer to me he said that, if necessary, he would consult with the British shipping lines about difficulties which certain exporters in this country are having in getting British ships to convey their exports to Cuba? Does his Answer today mean that he is not interested, or does it mean that he is now beginning to break under pressure from across the Atlantic? Is it not time that the right hon. Gentleman made perfectly clear to the Americans that, just as they feel that they are entitled to trade with Russia without consulting us—next week they are sending a trade mission to Rumania—we are entitled to carry on legal and legitimate trade with anyone we like without causing any offence to them and without their standing in our way?

The Prime Minister: I agree with the latter part of the hon. Gentleman's supplementary question, and, of course, we have made this clear to the United States of America. There is another Question on the Order Paper dealing with that.
I said that I would have consultations, if necessary, but no shipping company has asked me for consultations. I must allow the shipping companies to decide whether or not they wish to trade with Cuba. If they have difficulties, of course, they can come to see me at any time.

Mr. P. Williams: Is not this simply a straightforward commercial decision by British shipping lines? Will my right hon. Friend make clear that this is exactly what the situation is but that, if British shipping lines run into difficulties, he will do his best to help them?

The Prime Minister: I think that that is another way of saying exactly what I said just now.

Mr. Mayhew: Will the Prime Minister take this opportunity of denying the reports that the Government have agreed with the Americans to discourage our trade with Cuba?

The Prime Minister: I thought that I had made that clear to the hon. Member for Jarrow (Mr. Fernyhough).

Mr. Speaker: Order. I have repeatedly to point out that one cannot ask Ministers to contradict rumours for which they are not responsible.

Mr. Emrys Hughes: asked the Prime Minister what reply he proposes to make to the recent representations made to him by President Johnson regarding Her Majesty's Government's policy on trading with Cuba.

The Prime Minister: I have stated Her Majesty's Government's policy on trade with Cuba in the House. The details of any exchanges of view I may have with President Johnson would be confidential.

Mr. Hughes: Can the Prime Minister give us a definite assurance that he will not retreat on this question of Cuba? Public opinion in this country wishes trade with Cuba to be continued. Does not the right hon. Gentleman think that, in view of the attacks on this country in the United States, it would be a good thing for him as Prime Minister to broadcast and explain Britain's position?

The Prime Minister: I think that Britain's position is absolutely clear. We follow our ordinary commercial practice, which is to trade with other countries unless we happen to be at war with them or in the case of the COCOM list in which, as the hon. Member knows, we have some reservations on strategic materials.

Mr. H. Wilson: Is the Prime Minister aware that we on this side fully support that proposition about British policy in relation to trade with Cuba and other countries? [Interruption.] In view of the right hon. Gentleman's reference to a strategic embargo, is he aware that we support him on that, too, and would like to see one applied to South Africa? I apologise, Mr. Speaker, for being diverted by hon. Members opposite. However, is the right hon. Gentleman aware that, while we support the line which he took in 1963 on Cuba, we should like from him an explanation of how the Government came to reduce our exports to Cuba from 42·6 million dollars worth in 1959 to 5·4 million dollars worth last years? Is it the fact that the Government had been discouraging trade with Cuba until 1963?

The Prime Minister: It has nothing at all to do with the Government. There has been a fall in exports to Cuba, but that is not really surprising in view of what has been going on in Cuba. The exports are now rising again. As I have said time and again, this must be a matter of commercial judgment for British firms and for shipping firms, and we do nothing to interfere with their ordinary commercial practice.

Oral Answers to Questions — NATIONAL ECONOMIC DEVELOPMENT COUNCIL

Mr. Lubbock: asked the Prime Minister what action the Minister of Labour and the Chancellor of the Exchequer are taking with a view to preparing a joint scheme for placing before the National Economic Development Council proposals for the phased introduction throughout all sectors of employment of the 40-hour week, three weeks' holiday with pay and equal pay for women for equal work, as a contribution towards a positive incomes policy.

The Prime Minister: Our first task must be to secure agreement on the general principles of an incomes policy, and I very much hope that the National Economic Development Council will continue its discussions of these most important matters. Within the framework of these general principles, specific


decisions on terms and conditions of employment, including the choice between more leisure and more goods and services, would continue to be matters for collective bargaining between employers and workers.

Mr. Lubbock: Can the Prime Minister explain to me what the difference is between general principles and the sort of harmless platitudes which we have been getting from the Government on a national incomes policy? In order that a national incomes policy may succeed, are not positive objectives needed, and does not the right hon. Gentleman recognise that the matters mentioned in my Question are being discussed at trade union conferences and that it would be much better if we could develop long-term policies for dealing with them in an orderly manner rather than leave them for the kind of competitive "rat-race" we have had so far?

The Prime Minister: I can think of cases in which general principles are almost indistinguishable from harmless platitudes, but I shall spare the hon. Gentleman any embarrassment. If we are to have an incomes policy in this country, it must be, in a free society, by consent. We hope to reach it in that way.

Mr. K. Lewis: Is my right hon. Friend aware that I have calculated that we in this House work more than a 40-hour week and that we intend to do our best to ensure that the national effort is assisted by permitting the hon. Member for Orpington (Mr. Lubbock), after the next election, to get a job where he does work a 40-hour week?

Oral Answers to Questions — UNITED NATIONS PEACE- KEEPING OPERATIONS

Mr. A. Henderson: asked the Prime Minister whether he has now considered the proposal for earmarking British contingents for use in United Nations peace-keeping operations; and whether he will make a statement.

The Prime Minister: Yes, Sir. The British Permanent Representative at the United Nations has already discussed this with the Secretary-General. They

have agreed to keep in touch on the subject and to study together the best way in which this country can help with future United Nations peace-keeping operations.

Mr. Henderson: Does that reply mean that Her Majesty's Government are willing to provide British contingents for United Nations peace-keeping forces provided that the Security Council or the General Assembly concur? Is that the effect of the Answer?

The Prime Minister: We are always willing to provide forces for a United Nations operation if we approve of that operation. We can always do this because our Regular forces are highly trained, unlike those of some other countries which have greater difficulties. What I am doutbful about is whether we should earmark forces from a particular place. Therefore, I would rather retain our right to give the necessary forces to the United Nations from where we can best find them.

Mr. H. Wilson: In view of the very wise words of the Foreign Secretary on this subject which he included in the hand-out of his speech in Washington, and in view of the fact that he did not say them when he came to make his speech, would the Prime Minister say whether the words in the hand-out represent the policy of Her Majesty's Government, or the speech as delivered?

The Prime Minister: Both.

Sir C. Osborne: May I ask my right hon. Friend whether he has considered the new, jingoistic proposal to use heavy tanks with live ammunition in Cyprus put forward by the Leader of the Opposition?

The Prime Minister: I am willing to consider anything, but I thought that that was rather wide of the mark.

Oral Answers to Questions — FOREIGN OFFICE, COMMON- WEALTH RELATIONS OFFICE AND MINISTRY OF DEFENCE

Mr. Warbey: asked the Prime Minister what steps are taken to coordinate, in areas of the world where British forces are on active service, the


political responsibilities of the Foreign Office, the Commonwealth Relations Office, and the Ministry of Defence.

The Prime Minister: Arrangements are mace in all the areas concerned to ensure that the appropriate political advice is available to the Commanders-in-Chief or Commanders of British Forces. 'The arrangements vary in different areas. Co-ordination of policy for every theatre takes place in London by regular consultation between the Ministers and Departments concerned.

Mr. Warbey: I recognise that the Prime Minister has accepted personal responsibility for our present neo-jingoistic policy, but can he say exactly how this machinery which he describes can be made to work in such a way as to prevent the Commonwealth Relations Office and the Ministry of Defence from constantly embarrassing the Foreign Secretary in his relations with foreign Powers and the United Nations?

The Prime Minister: The hon. Member is making quite unreasonable assumptions. With the High Commission, we have our military advisers. With the Commanders-in-Chief, we have political advisers. In this way we get the advice back to London, and it is co-ordinated between the different Departments.

Mr. Rankin: Will the Prime Minister say on what advice he ordered the recent bombing in the South Arabian war?

The Prime Minister: I think that I made this quite clear yesterday—that our troops were in need of air cover, and I am going to see that they get the air cover. [HON. MEMBERS: "Hear, hear."]

Oral Answers to Questions — WASHINGTON—MOSCOW (DIRECT TELEPHONE LINE)

Mr. Fernyhough: asked the Prime Minister if he will approach President Johnson and Premier Khrushchev with a view to getting their agreement to Great Britain being linked with the direct telephone line now established between Washington and Moscow.

The Prime Minister: I would refer the hon. Gentleman to the reply which

I gave the hon. Gentleman the Member for Glasgow, Woodside (Mr. Carmichael) on 17th December last, in which I said that the direct link between Washington and Moscow provides a reliable line of communication between East and West in an emergency. I already have effective direct communications with President Johnson. I will keep the possibility of a further extension of these arrangements in mind.

Mr. Fernyhough: But does not the Prime Minister appreciate that this hot line was established because Cuba made both the United States and Russia see that the fate of the world might be decided in a matter of seconds? In those circumstances, does not the right hon. Gentleman realise that many British people feel that it would be much better to be connected directly to the hot line than to have a place at the top table?

The Prime Minister: I have said that I will consider this matter. At the moment, we have very direct and quick communications with Moscow.

Mr. P. Noel-Baker: Will the Prime Minister propose that the Secretary-General of the United Nations should also be linked to the hot line?

The Prime Minister: I should think that all the lines to the Secretary-General are hot. However, this is a matter which the Secretary -General can well decide for himself.

Oral Answers to Questions — POLARIS MISSILES (WARHEADS)

Mr. Woodburn: asked the Prime Minister, in view of the fact that the performance of the proposed British nuclear warhead for Polaris missiles may prove superior to that used by the United States, whether he will consult President Johnson with a view to comparative tests to ensure that both the British and United States missiles will be fitted with the best warhead available.

The Prime Minister: Information already available indicates that the performances of the British and American warheads will be closely comparable.

Mr. Woodburn: In that case, is there any justification for us duplicating the


expenditure required to produce this particular warhead? Would it not be much wiser to decide that, since we cannot have an independent weapon of our own and that we must buy the Polaris missile, we should buy the whole thing together?

The Prime Minister: No, I do not think so. I think that we are producing a warhead which serves its purpose and that we should continue to do so.

Mr. Awbery: Is the Prime Minister aware that his reply will create confusion in the minds of ordinary people in this country, as it does in mine? We have two allies struggling to be the foremost nation in nuclear power and nuclear weapons and, at the same time, we tell the people of this country that we depend entirely upon the United Nations Organisation as the means of preventing war.

The Prime Minister: I wish that we could rely on collective security to provide the defence of this country, but we cannot. The hon. Member cannot have it both ways. He cannot criticise us for getting American material and then say that he wants to get everything from America.

Mr. Woodburn: Would the Prime Minister clear up one point? Is it the same warhead, or a different warhead with the same potentialities?

Mr. G. Brown: Both.

The Prime Minister: I think that the right hon. Gentleman is right. It is probably both. However, I should like notice of that.

Oral Answers to Questions — EUROPEAN ECONOMIC COMMUNITY

Mr. Woodburn: asked the Prime Minister if he will seek a meeting with President de Gaulle either before or after the Commonwealth Prime Ministers' conference to discuss the subject of Great Britain and the Common Market.

The Prime Minister: No, Sir. I can see no practical value in such a meeting on this subject at this stage.

Mr. Woodburn: As the Prime Minister is meeting the Commonwealth Prime Ministers, and as this subject of becoming part of Europe has played a very important part in the Commonwealth's consideration, will the right hon. Gentleman be in a position to give guidance to the Commonwealth on the future policy of this country in regard to entry into the European Economic Community?

The Prime Minister: I think that if I have to give any guidance—I do not know whether this will be necessary—it will be the same as I have given the House. We cannot tell whether the circumstances will arise again in future. If they did, Parliament would have to decide how to deal with the situation.

Mr. H. Wilson: Would the Prime Minister at any rate make clear to the Commonwealth Prime Ministers on this occasion that he no longer regards as acceptable the terms which the then Lord Privy Seal negotiated in 1962?

The Prime Minister: If these negotiations were to start again, it would be our concern to ensure that the Commonwealth interest was satisfied.

Mr. Blyton: Is the Prime Minister aware that we are quite pleased with the Answer that he gave—that he does not want to meet President de Gaulle? Would he further state that he will make this an issue at the next election so that we know where the Conservative Party stands if, unfortunately, it is returned to power?

The Prime Minister: I must make it clear that I did not say that I did not want to meet General de Gaulle. I always enjoy meeting him very much. I said that there was no point in meeting him on this subject at this time.

TOLL BRIDGES

3.31 p.m.

Mr. William Hamilton: I beg to move,
That leave be given to bring in a Bill to nationalise certain toll bridges without payment of compensation.
It is well known that the Standing Orders of the House do not permit a private Member to move a Motion or to introduce a Bill which would involve a charge on the public revenue. This fact explains the confiscatory nature of the language which I use, although the more I have investigated this matter the stronger the case for confiscation seems to become.
For upwards of two years, I have been delving into the history of the five toll bridges with which my Bill would be concerned. I will refer to them briefly. Swynford Bridge, across the Thames from Swynford, in Berkshire, to Eynsham, in Oxfordshire, is on the A.4141. An old Act of Parliament, passed in 1767, exempted the income arising from the tolls on this bridge from all forms of local and national taxation by using words to the effect that the taxes, almost non-existent on the then existing ferry, would continue to apply to the bridge, but that it would not be liable to any
greater assessment, tax, rent, rate duty, or payment whatsoever.
That Act is still on the Statute Book and it means that the income from this bridge is completely free of all forms of taxation, rates and even Estate Duty.
The estimated yield from this bridge is £6,000 annually. The bridge has been in the hands of the Earl of Abingdon's family for 200 years. They sit tight and "keep mum" about it. I understand that the noble Lord is greatly in favour of an incomes policy in the national interest.
I refer next to Whitchurch Bridge, across the River Thames from Whitchurch, in Oxfordshire, to the Parish of Pangbourne, in Berkshire, on the B.471. This bridge was authorised by a 1792 Act, which is still on the Statute Book. The proprietors listed in the Act include the Rev. John Symonds Breedon, the Rev. Coventry Lichfield, D.D. and his wife Hannah, and the Rev. John Lichfield. The list sounds

very much like the Macmillan family tie-up today. In parenthesis, may I say that in looking into these matters I have been struck forcibly by the highly developed acquisitive instincts of the aristocracy and the Church. Whatever the hereafter might hold in store, there is nothing like feathering one's nest in the herebefore.
Whitchurch Bridge is owned by the Whitchurch Toll Bridge Company. It is a private company, it is not registered anywhere and nothing can be discovered about it, except that it is very much like the sources of the Tory Party's funds. The charges on the bridge are 6d. for a car, 1s. for a lorry, and 1d. for pedestrians. I have a letter from a resident in Whitchurch who states that
Abuse is thrown at anyone daring to walk or drive past the gate, including injured persons being rushed to our local doctor (1s. the toll, 2s. the prescription).
I refer next to Whitney Bridge, which is across the River Wye between Whitney and Clifford, in the County of Hereford, on the A.438. This derives from an Act passed in 1780 and an amending Act in 1797 after the bridge had collapsed three times. It is now owned by the Whitney Bridge Trust, which is not registered under the terms of the Registration of Business Names Act, 1916, and no one, not even the Board of Trade, knows anything about it. But the same tax "racket" is involved in this one, too.
I come now to Aldwark Bridge, in Yorkshire, over the River Ure, about halfway between Boroughbridge and York. The original Act was passed in 1772, naming the proprietors and fixing the charges. Today's charges include ½d. for pedestrians, 1d, for cyclists, 2d. for motor cyclists, 9d. for cars and 1s. 6d. for lorries up to 2 tons and 9d. a ton thereafter. The wording of the Act states that
the said bridge shall not be rated or assessed for or towards the payment of any land tax or any other parochial rate or tax whatsoever.
The Minister of Transport told me on 15th April this year that this bridge was owned by the Yorkshire Farmers' Limited. I am a great friend of the farmers and, therefore, I was very interested in this. I discovered, however, that the bridge was sold by the Yorkshire Fanners in April, 1962. So


the little fellow in the Ministry of Transport was two years out of date with his information. The bridge was sold to an unknown man from Leeds for a figure reputed to be £90,000. Lord Halifax, as vice-president of the Yorkshire Farmers, would presumably enjoy part of that little tax-free gain.
The particulars of the sale are fascinating. Through the energies of the Library staff, I managed to get hold of a brochure of the sale. It has a nice photograph of the bridge on the front and, in a box in red letters, it states:
Exempted by Ancient Statute from any form of Income Tax and Rates.
It also states inside:
This sale, therefore, is possibly unique in that it affords the opportunity of acquiring an income which, irrespective of the normal tax liabilities of the owners, is not subject to rating, Income Tax, or any other form of tax.
It goes on to say that the bridge is exempt from death duties and that
Copies of Counsels' opinion are available for inspection at the offices of the chartered auctioneers.
I have a copy of counsel's advice, too, and I quote from Mr. Stuart Bates, of 4 Pump Court, Temple, W.C.2:
It follows, in my view, that it might be properly maintained on the death of a person who owned the bridge that the value of the bridge should not be brought in when computing the value of his estate for death duty purposes: That the bridge was exempt from death duties.
There are further interesting comments in this brochure which I should like to inform the House about. It gives a breakdown of the total charges and the total income, and according to this, in the year ended 30th June, 1961, the net tolls income free of rates, taxes—anything was £2,016. It is explained that the Yorkshire farmers themselves use it to the extent of about £250 additional income; so the net income from this bridge is about £2,300 free of all kinds of tax. The charming lady who it the tollkeeper, Mrs. Wright, is paid a wage of £3 a week taxable income—plus her tied cottage, just to maintain the feudal element.
This bridge is used by the R.A.F. personnel at Linton-on-Ouse. I have had letters from airmen there and I should like to quote from one, from Senior Aircraftman Munro:

I was obliged to pay 7s. 6d. a week in tolls when on night flying"—
out of his own pocket—
and, making four trips to Harrogate a day, correspondingly more.
This is happening to many airmen on that R.A.F. station. While the airman pays tax on his few shillings a day he pays this tax-free income to the owners of the bridge.
I turn, finally, to Selby Bridge, over the River Ouse in Yorkshire, on trunk road A.19. This is the real bonanza. This is the real jackpot. Mr. Ferranti could hardly ask for more. This dates back to an Act of 1791, which set up the Selby Bridge Company. Pedestrians are charged ½d., cows 1d. apiece, every drove of hogs 6d. a score; and cars are 9d. each. According to the figures which I got from the Ministry of Transport a week or two ago, 6,800 vehicles a day were going across in August, 1963. That works out at £255 a day, or more than £ 90,000 a year gross.
The hon. Member for Howden (Mr. Bryan), whom I see sitting there, estimated in 1962 that the net income from this bridge was £70,000 a year. That was challenged, and what he said then I repeat now—I will be glad to publicise the accounts of the company if they are prepared to send them to me.
The chairman of the company is Commander Percy—not our hon. and gallant Friend the Member for Kingston upon Hull, East (Commander Pursey). This man lives at Hythe, in Hampshire, and he declares that this income is grossly exaggerated, but I am waiting for him to tell me what the true facts are.
I want to end on this note. At a time when old-age pensioners have their pensions reduced if they earn more than a few pounds a week, at a time when every worker in the country must submit every penny of his earnings to the rigorous scrutiny of P.A.Y.E., it is monstrous that this legalised private pillage of the public purse by a privileged few should be allowed to continue. The Government have officially informed me that they are prepared to do absolutely nothing about it. They have not the time nor the will nor the guts to get rid of this anachronism and injustice. They are quite happy to let these toll bridge proprietors have not only their pound of flesh but the whole carcase.
I hope that a Labour Government will put a stop to this nonsense, not because it is one of the commanding heights of the economy but because it is one of the typical murkier depths of it. I ask leave to bring in the Bill.

3.45 p.m.

Mr. Paul Bryan: I beg to oppose the Motion.
The hon. Member for Fife, West (Mr. W. Hamilton) is becoming something of a specialist, if not a very informed specialist, on toll bridges. The last time he spoke about them was in the Budget debate. He said that my constituent, Lord Halifax, enjoyed a large tax-free income from Selby toll bridge The next day, in a personal statement, he apologised to the House for the fact that his information had proved incorrect.
The House, of course, accepts statements of this sort in the spirit in which they are given, but as the original, untrue words in his speech were clearly meant to be as offensive as he could make them, which is very offensive indeed, I should have thought—and certainly many of my constituents cannot understand why the hon. Member did not—that he would have used that occasion, the occasion of his statement, to apologise personally to Lord Halifax. It is not too late now to do so personally, or by letter.
Much of the hon. Member's speech has been devoted to the anachronism of tax-free toll bridges. This is one thing about which the whole of this House would, I think—it would be about the only thing—agree with him. My particular constituency headache is, of course, the Selby toll bridge. Time and again, over the years, my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner), who is sentry at the other end of the bridge, and I have pressed the Government to do away with its tiresome tolls.
Where we disagree with the hon. Member is on how to get rid of them. The right and commonsense way to do so is to press ahead with the by-pass bridge which is already proposed. It would attract a good deal of the traffic off the present tell bridge and that would automatically reduce its inflated value. The bridge could then be bought reasonably and fairly from its present owners. My complaint, of course, as the Member for

the constituency, is that the Government have taken too long to do this owing to their underestimate of the amount of traffic which the new bridge would take.
The hon. Member for Fife, West, on the other hand, says let the State take the bridge from its owners without compensation. But once States or Governments start robbing their citizens—[HON. MEMBERS: "Robbing whom?"]—of what, by the law of the land, is theirs they do not stop at toll bridges. Once Left-wing politicians get a taste of power this is a temptation they can never resist. The Labour Party's present plans for steel, road haulage and land all have an element of nationalisation without compensation.

Mr. A. Woodburn: On a point of order. You will remember, Mr. Speaker, that my hon. Friend the Member for Fife, West (Mr. W. Hamilton) explained that it would not be in order for him to propose anything which involved imposing any money payments and that that would be a matter for the Government. Would you, therefore, confirm, perhaps, that he was in order and it would not have been in order for him to propose compensation?

Mr. Speaker: No point of order arises for me.

Mr. Bryan: The hon. Member's Motion is more important than he realises, because it comes at a time when the whole country is thirsting to know exactly what Labour would nationalise. Therefore, his Motion, like Selby Bridge, has an inflated value. When the Prime Minister tried to get some clarification on this very subject from the Leader of the Opposition that right hon. Gentleman referred him to Signposts to the Sixties. About that pamphlet the hon. Member for Blackburn (Mrs. Castle) has said:
Give this document to a man like Ian Mikardo and you could have this country's industry transformed. But give it to someone like Woodrow Wyatt and you won't get very far.
Looking for a more precise guide to the Labour Party's policy on nationalisation in general and toll bridges, of course, in particular, I read the words of the Leader of the Opposition himself. This is what he says:


So, with steel, road transport, water, with the creation of newly publicly-owned industries, with State-owned factories in backward or declining industries, with control of State money that is put in, with State industries or participation, with the expansion of the productive powers of publicly-owned industries, with the right of the State to intervene in monopolies, take-over bids and mergers, you have there a very substantial expansion of public ownership.
Just to make sure that we understand this, the right hon. Gentleman says:
When we say extend public ownership in any industry"—

Mr. Archie Manuel: On a point of order, Mr. Speaker. I should like you to give the House your advice and guidance. The Motion moved by my hon. Friend the Member for Fife, West (Mr. W. Hamilton) deals with one subject matter only—toll bridges. Is it in order for the hon. Member for Howden (Mr. Bryan) to give the House a preview of his constituency election speech?

Mr. Speaker: I have heard nothing out of order yet.

Mr. Bryan: I was going on to say that in case we did not understand the import of what I quoted from the remarks of the Leader of the Opposition, he went on to say at another time:
When we say extend public ownership in any industry, we mean take over, nationalise.
In order not to mislead the House, I must admit that this was way back in 1961, before the right hon. Gentleman was blinding the electorate with science. Since then he has only just about once mentioned this subject.
In an unguarded moment when the right hon. Gentleman had just became Leader of the Opposition, he said:
Clause Four is the"—
[HON. MEMBERS: "Speak about toll bridges."] Toll bridges are things we agree about. It is nationalisation without compensation that we do not agree about. That is, therefore, what we are debating.
If I may go on with the quotation from the remarks of the Leader of the Opposition, he said:
Clause Four is the position of the whole party. It is the policy of the whole party.
If the Leader of the Opposition—

Mr. William Warbey: On a point of order, Mr. Speaker. I understood that there were rather special rules governing the type of speech which could be made on the occasion of the presentation of a Ten Minutes Rule Bill and that the speaker for the opposition must make his case for opposition to the Bill, and that that is his sole function.

Mr. Speaker: The hon. Member is entitled to oppose leave, and until the observation of the hon. Member for Howden (Mr. Bryan), amidst some noise a moment ago, I thought that he was in order. On the principle of the argument, what is asked for here is a measure of nationalisation. A swelling of nationalisation is a general peril in respect of that argument. This is one pimple on the surface of it. But the hon. Member slightly deflected from that course a moment ago and said that he was agreed about that particular pimple.

Mr. Bryan: If I may go on, if the Leader of the Opposition means what he says in these passages, and I am afraid that he does, then nationalisation, including nationalisation of toll bridges, is by far the most important feature in the Labour programme. In fact, it is the Labour Party's trump card. In this opinion-forming pre-General Election period, one would have thought that the faithful would be talking about nothing else. But Thursdays come and go—

Mr. R. T. Paget: On a point of order, Mr. Speaker. Surely, once an hon. Member has said that he agrees with the proposal in the Motion for leave to introduce the Bill, he has placed himself out of order in opposing it, which is the only thing that he is entitled to do.

Mr. Speaker: Unless my attention was less accurate than that of the hon. and learned Gentleman, at some stage of his speech the hon. Member for Howden was saying, "Although we agree about toll bridges, we do not agree with the method proposed". That keeps him within the principle of opposing.

Mr. Paget: Further to that point of order, Mr. Speaker. The hon. Gentleman certainly said that at one stage. A moment ago, when hon. Members called


to him to speak about toll bridges, he said, "I am not speaking about that, because we are agreed on that."

Mr. Speaker: I do not propose to argue about that. It is a false point. It is true that the hon. Member said, "Toll bridges is a subject matter about which we agree"—not in those words, but that is the way in which he made the point. But that did not detract at any stage from what he said earlier—"We do not agree with the method in relation to that subject matter."

Mr. Bryan: As I was saying, Thursdays come and go. We in this House listen for the announcement of Supply days on nationalisation demanded by the Opposition Front Bench. We listen to questions from restless back benchers pressing the Leader of the House for the same thing.

Mr. Manuel: The hon. Member should have a better brief than that.

Mr. Bryan: One would think that the Leader of the Opposition, perhaps in a week-end speech, would have devoted some attention to these things, instead of which his Left wing has to be content with bellicose speeches about Cyprus and his brand new ideas about the tactical handling of heavy tanks in non-tank country.
In his pre-leadership days the Leader of the Opposition—[HON. MEMBERS: "Speak about toll bridges."] I shall be coming back on the bridge at any moment. In those days the Leader of the Opposition complained that his party, in its presentation of nationalisation, was combining
the minimum intention with the maximum of provocation.
He said:
Instead of our previous" —

Hon. Members: The hon. Member is reading.

Mr. Bryan: I am at the moment quoting the Leader of the Opposition. He said:
Instead of our previous defensive and almost apologetic postures, we shall be able to show that by our nationalisation policy, and only by that policy, can we carry out a plan essential for Britain's future.
That is exactly what the hon. Member for Fife, West is saying about toll bridges.
Since then the Leader of the Opposition has learnt to advocate nationalisation exactly the other way round, with the maximum of intention and the minimum of provocation. He has been listening, of course, to the hon. Member for Leeds, West (Mr. C. Pannell), who, after the last General Election, very frankly, but rather sadly, said:
It has been proved in the election that wherever a candidate stood in a constituency containing a nationalised industry, he had to lay off the subject of public ownership.
All this is highly pertinent to the Motion that we are debating, because the Motion's importance depends on the degree of support the Labour Party is to give to the principle of nationalisation without compensation. But the trouble is that the hon. Member is just as much in the dark as we are. Today, the hon. Member is flying a kite. He is testing the opinion of his party, and his hon. Friends appear to be with him. He is giving a lead. He is tired of the Duke of Plazatoro type of leadership of the Leader of the Opposition with regard to nationalisation, and the one-man-band on everything else.
I congratulate the hon. Member for Fife, West on the purity of his Socialism and his inspiration in adding to the already existing list of objects for nationalisation without compensation this new subject of toll bridges. He is inspired by the hon. Member for Coventry, East (Mr. Crossman), who said—appropriately enough—when he was talking to the Scottish Labour Party:
Those who thought we were going to abandon Socialism will find that Labour Party policy will present new forms of public ownership.
In fact, the hon. Member for Fife, West, has taken the text of his speech today from the writings of the hon. Member for Ebbw Vale (Mr. M. Foot), who said:
Socialism without public ownership is nothing but a fantastic apology.

Lieut.-Colonel Sir Walter Bromley-Davenport: Answer.

Mr. Woodburn: On a point of order. I gathered that it was the order of the House that in presenting a Motion of this kind a speech of short duration could be made in sup port and a speech of short duration could be made in reply. Is the hon. Member for Howden (Mr. Bryan) providing a precedent for long speeches in future?

Mr. Speaker: What the Standing Order refers to is a brief explanatory statement from the Member who makes and from the Member who opposes the Motion. I can give no further guidance. I have difficulty in gauging the length and the number of points of order. I certainly think the hon. Member for Howden (Mr. Bryan) should bring his speech to an end very soon.

Mr. Ernest Popplewell: On a point of order. Is it not in accordance with the customs of this House and in accordance with the Rulings of many of your predecessors, Mr. Speaker, that hon. Members should not read speeches, although they are allowed to make copious reference to notes? Is it not obvious to you and to the rest of the hon. Members in the House that we are having to endure listening to what is obviously a brief provided by a "ghost writer", which is being read in the utmost detail sentence by sentence and paragraph by paragraph?

Mr. Speaker: I do not understand the hon. Member's conception of a point of order and how he can suppose that it is the duty of the occupant of the Chair to express an opinion on a matter such as that. [Interruption.]

An Hon. Member: Shut up.

Mr. Joseph Slater: Do not tell me to shut up.

Mr. Speaker: Order. I think it best if the House observes silence while the Speaker is addressing it on a point of order.
Upon the rule as raised by the hon. Member for Newcastle-upon-Tyne, West (Mr. Popplewell) it is perfectly true that it is out of order to read speeches, but it will be found that my predecessors have sometimes passed off the matter by referring to an hon. Member making copious use of his notes. I am not sure that we can object when an hon. Member is apparently seeking to quote from some speech verbatim in order to get

the reference accurate. Owing to the noise it was difficult to say whether what the hon. Member was saying was in order or no.

Mr. Manuel: It is a brief from the Vice-Chairman of the Tory Party.

Mr. Arthur Tiley: On a point of order. Would it be in order—[Interruption.]

Mr. Speaker: I do not propose to be physically exhausted in trying to hear a point of order which is offered to me. I shall be obliged to the House for letting me hear it.

Mr. Tiley: In view of the fact that my hon. Friend the Member for Howden (Mr. Bryan) has been so much interrupted, and is making such an excellent speech, would it be in order for him to begin again?

Mr. Speaker: It is not for me to adventure a view about whether the House would welcome that proposition with enthusiasm. From my point of view we have soon to bring this part of the proceedings to an end and I should welcome the House letting the hon. Member for Howden conclude his speech.

Mr. Bryan: Mr. Speaker, I am, in fact, about to conclude. Instead of going back to the beginning of my speech I will read something which, I think, the House did not hear:
Socialism without public ownership is nothing but a fantastic apology.
The hon. Member for Fife, West, is chastising his leader with the words of the late Aneurin Bevan, who said:
There are some in the movement who are lukewarm about nationalisation. Their place is outside it.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—

The House divided: Ayes 144, Noes 224.

Division No. 90
AYES
[4.6 p.m.


Abse, Leo
Blackburn, F.
Butler, Herbert (Hackney, C.)


Ainsley, William
Blyton, William
Butler, Mrs. Joyce (Wood Green)


Allaun, Frank (Salford, E.)
Boardman, H.
Carmichael, Neil


Awbery, Stan (Bristol, Central)
Bowles, Frank
Chapman, Donald


Barnett, Guy
Boyden, James
Cliffe, Michael


Benn, Anthony Wedgwood
Brockway, A. Fenner
Craddock, George (Bradford, S.)




Crossman, R. H. S.
Hunter, A. E.
Price, J. T. (Westhoughton)


Cullen, Mrs. Alice
Irvine, A. J. (Edge Hill)
Probert, Arthur


Dalyell, Tam
Irving, Sydney (Dartford)
Rankin, John


Darling, George
Janner, Sir Barnett
Rees, Merlyn (Leeds, S.)


Davies, G. Elfed (Rhondda, E.)
Jay, Rt. Hon. Douglas
Reid, William


Deer, George
Jeger, George
Rhodes, H.


Delargy, Hugh
Jenkins, Roy (Stechford)
Roberts, Albert (Normanton)


Dempsey, James
Johnson, Carol (Lewisham, S.)
Robertson, John (Paisley)


Diamond, John
Jones, J. Idwal (Wrexham)
Rodgers, W. T. (Stockton)


Dodds, Norman
Jones, T. W. (Merioneth)
Rogers, G. H. R. (Kensington, N.)


Doig, Peter
Kelley, Richard
Short, Edward


Driberg, Tom
Kenyon, Clifford
Silkin, John


Duffy, A. E. P. (Colne Valley)
Lawson, George
Silverman, Julius (Aston)


Ede, Rt. Hon. C.
Lee, Miss Jennie (Cannock)
Slater, Mrs. Harriet (Stoke, N.)


Edelman, Maurice
Lipton, Marcus
Slater, Joseph (Sedgefield)


Edwards, Rt. Hon. Ness (Caerphilly)
McBride, N.
Snow, Julian


Edwards, Robert (Bilston)
MacColl, James
Steele, Thomas


Edwards, Walter (Stepney)
McInnes, James
Stonehouse, John


Evans, Albert
McLeavy, Frank
Stones, William


Fernyhough, E.
MacPherson, Malcolm
Strauss, Rt. Hn. G. R. (Vauxhall)


Finch, Harold
Mallalieu, E. L. (Brigg)
Swingler, Stephen


Fletcher, Eric
Manuel, Archie
Symonds, J. B.


Foot, Michael (Ebbw Vale)
Mapp, Charles
Taverne, D.


Fraser, Thomas (Hamilton)
Marsh, Richard
Taylor, Bernard (Mansfield)


Galpern, Sir Myer
Mason, Roy
Thomson, G. M. (Dundee, E.)


Ginsburg, David
Mayhew, Christopher
Tomney, Frank


Gourlay, Harry
Mendelson, J. J.
Wainwright, Edwin


Grey, Charles
Mitchison, G. R.
Warbey, William


Griffiths, David (Rother Valley)
Monslow, Walter
Wells, William (Walsall, N.)


Gunter, Ray
Moody, A. S.
White, Mrs. Eirene


Hannan, William
Neal, Harold
Wilkins, W. A.


Harper, Joseph
Noel-Baker, Francis (Swindon)
Willey, Frederick


Hayman, F. H.
Noel-Baker, Rt. Ht. Philip (Derby, S.)
Williams, W. T. (Warrington)


Healey, Denis
O'Malley, B. K.
Willis, E. G. (Edinburgh, E.)


Henderson, Rt. Hn. Arthur (Rwly Regis)
Oram, A. E.
Winterbottom, R. E.


Holman, Percy
Owen, Will
Woodburn, Rt. Hon. A.


Houghton, Douglas
Paget, R. T.
Woof, Robert


Howell, Denis (Small Heath)
Pannell, Charles (Leeds, W.)
Wyatt, Woodrow


Howie, W.
Pargiter, G. A.
Yates, Victor (Ladywood)


Hoy, James H.
Paton, John



Hughes, Cledwyn (Anglesey)
Pavitt, Laurence
TELLERS FOR THE AYES:


Hughes, Emrys (S. Ayrshire)
Pearson, Arthur (Pontypridd)
Mr. Popplewell and


Hughes, Hector (Aberdeen, N.)
Peart, Frederick
Mr. W. Hamilton.



Pentland, Norman





NOES


Agnew, Sir Peter
Cordeaux, Lt.-Col. J. K.
Grosvenor, Lord Robert


Anderson, D. C.
Cordle, John
Gurden, Harold


Arbuthnot, Sir John
Corfield, F. V.
Hamilton, Michael (Wellingborough)


Ashton, Sir Hubert
Costain, A. P.
Harris, Frederic (Croydon, N.W.)


Awdry, Daniel (Chippenham)
Coulson, Michael
Harrison, Brian (Maldon)


Balniel, Lord
Craddock, Sir Beresford (Spelthorne)
Harrison, Col. Sir Harwood (Eye)


Barlow, Sir John
Cunningham, Sir Knox
Harvey, Sir Arthur Vere (Macclesf'd)


Batsford, Brian
Curran, Charles
Harvie Anderson, Miss


Beamish, Col. Sir Tufton
Currie, G. B. H.
Hastings, Stephen


Bell, Ronald
Dalkeith, Earl of
Heath, Rt. Hon. Edward


Bennett, F. M. (Torquay)
Dance, James
Henderson, John (Cathcart)


Bevins, Rt. Hon. Reginald
Deedes, Rt. Hon. W. F.
Hendry, Forbes


Biffen, John
Digby, Simon Wingfield
Hiley, Joseph


Biggs-Davison, John
Donaldson, Cmdr. C. E. M.
Hill, J. E. B. (S. Norfolk)


Bingham, R. M.
du Cann, Edward
Hobson, Rt. Hon. Sir John


Birch, Rt. Hon. Nigel
Eden, Sir John
Holland, Philip


Black, Sir Cyril
Elliot, Capt. Walter (Carshalton)
Hollingworth, John


Bossom, Hon. Clive
Eiliott, R. W. (Newc'tle-upon-Tyne, N.)
Hopkins, Alan


Bourne-Arton, A.
Emery, Peter
Hornsby-Smith, Rt. Hon. Dame P.


Bowen, Roderic (Cardigan)
Emmet, Hon. Mrs. Evelyn
Howard, Hon. G. R. (St. Ives)


Box, Donald
Erroll, Rt. Hon. F. J.
Howard, John (Southampton, Test)


Boyd-Carpenter, Rt. Hon. John
Farr, John
Hughes Hallett, Vice-Admiral John


Brewis, John
Fell, Anthony
Hughes-Young, Michael


Bromley-Davenport, Lt.-Col. Sir Walter
Finlay, Graeme
Hulbert, Sir Norman


Brown, Alan (Tottenham)
Fisher, Nigel
Hurd, Sir Anthony


Browne, Percy (Torrington)
Fletcher-Cooke, Charles
Hutchison, Michael Clark


Buck, Antony
Forrest, George
Jackson, John


Bullard, Denys
Gilmour, Ian (Norfolk, Central)
Johnson, Eric (Blackley)


Campbell, Gordon
Gilmour, Sir John (East Fife)
Johnson Smith, Geoffrey


Carr, Rt. Hon. Robert (Mitcham)
Glover, Sir Douglas
Kaberry, Sir Donald


Channon, H. P. G.
Glyn, Sir Richard (Dorset, N.)
Kerby, Capt. Henry


Chichester-Clark, R.
Goodhew, Victor
Kerr, Sir Hamilton


Clark, Henry (Antrim, N.)
Gough, Frederick
Kershaw, Anthony


Clark, William (Nottingham, S.)
Gower, Raymond
Kimball, Marcus


Cleaver, Leonard
Grant-Ferris, R.
Kirk, Peter


Cole, Norman
Green, Alan
Kitson, Timothy


Cooper-Key, Sir Neill
Gresham Cooke, R.
Lagden, Godfrey




Lambton, Viscount







Lancaster, Col. C. G.
Osborn, John (Hallam)
Tapsell, Peter


Leather, Sir Edwin
Osborne, Sir Cyril (Louth)
Taylor, Edwin (Bolton, E.)


Lewis, Kenneth (Rutland)
Page, John (Harrow, West)
Taylor, Frank (M'ch'st'r, Moss Side)


Lilley, F. J. P.
Page, Graham (Crosby)
Teeling, Sir William


Lindsay, Sir Martin
Pannell, Norman (Kirkdale)
Temple, John M.


Linstead, Sir Hugh
Partridge, E.
Thatcher, Mrs. Margaret


Litchfield, Capt. John
Pearson, Frank (Clitheroe)
Thomas, Sir Leslie (Canterbury)


Lloyd, Rt. Hon. Selwyn (Wirral)
Peel, John
Thomas, Peter (Conway)


Longden, Gilbert
Pickthorn, Sir Kenneth
Thompson, Sir Kenneth (Walton)


Loveys, Walter H.
Pitt, Dame Edith
Thompson, Sir Richard (Croydon, S.)


Lubbock, Eric
Pounder, Rafton
Thorpe, Jeremy


Lucas, Sir Jocelyn
Price, David (Eastleigh)
Tiley, Arthur (Bradford, W.)


Lucas-Tooth, Sir Hugh
Prior, J. M. L.
Tilney, John (Wavertree)


McAdden, Sir Stephen
Proudfoot, Wilfred
Touche, Rt. Hon. Sir Gordon


MacArthur, Ian
Pym, Francis
Turner, Colin


McLaren, Martin
Quennell, Miss J. M.
van Straubenzee, W. R.


Maclay, Rt. Hon. John
Ramsden, Rt. Hon. James
Vaughan-Morgan, Rt. Hon. Sir John


McLean, Neil (Inverness)
Redmayne, Rt. Hon. Martin
Vickers, Miss Joan


McMaster, Stanley R.
Rees, Hugh (Swansea, W.)
Wade, Donald


Maitland, Sir John
Ridley, Hon. Nicholas
Walder, David


Markham, Major Sir Frank
Ridsdale, Julian
Walker-Smith, Rt. Hon. Sir Derek


Marlowe, Anthony
Robson Brown, Sir William
Ward, Dame Irene


Marshall, Sir Douglas
Roots, William
Wells, John (Maidstone)


Mathew, Robert (Honiton)
Russell, Sir Ronald
Whitelaw, William


Matthews, Gordon (Meriden)
Scott-Hopkins, James
Williams, Dudley (Exeter)


Maude, Angus (Stratford-on-Avon)
Seymour, Leslie
Williams, Paul (Sunderland, S.)


Mawby, Ray
Sharples, Richard
Wills, Sir Gerald (Bridgwater)


Maxwell-Hyslop, R. J.
Shaw, M.
Wilson, Geoffrey (Truro)


Maydon, Lt.-Cmdr. S. L. C.
Shepherd, William
Wise, A. R.


Mills, Stratton
Skeet, T. H. H.
Wolrige-Gordon, Patrick


Moore, Sir Thomas (Ayr)
Smith, Dudley (Br'ntf'd &amp; Chiswick)
Woodhouse, C. M.


More, Jasper (Ludlow)
Smyth, Rt. Hon. Brig. Sir John
Woodnutt, Mark


Morgan, William
Spearman, Sir Alexander
Woollam, John


Mott-Radclyffe, Sir Charles
Stainton, Keith
Worsley, Marcus


Nicholls, Sir Harmar
Stanley, Hon. Richard



Nicholson, Sir Godfrey
Stoddart-Scott, Col. Sir Malcolm
TELLERS FOR THE NOES:


Noble, Rt. Hon. Michael
Storey, Sir Samuel
Mr. Bryan and Mr. Hocking.


Oakshott, Sir Hendrie
Studholme, Sir Henry



Orr, Capt. L. P. S.
Talbot, John E.

Orders of the Day — RESALE PRICES BILL

As amended, considered.

New Clause.—(APPLICATION TO RESTRICTIVE PRACTICES COURT IN CONSEQUENCE OF PROCEEDINGS UNDER RESTRICTIVE TRADE PRACTICES ACT 1955.)

(1) Where, prior to the date on which this Act was passed, the Restrictive Practices Court has declared in proceedings under Part I of the Restrictive Trade Practices Act 1956 that a restriction relating to any goods is not contrary to the public interest (the Court having been satisfied in respect of that restriction of any one or more of the circumstances set out in paragraphs (a) to (f) and section 21(1) of the Act of 1956) the Court shall, on application made by any person or association who has duly given notice under section 6 of this Act in respect of goods of that description, make an order directing that the said goods shall be exempted goods for the purposes of this Act if it appears to the Court that in default of a system of maintained minimum resale prices applicable to goods of that description—

(a) the continued operation of the said restriction would become impracticable or would no longer have the results by reason of which it was declared by the Court to be not contrary to the public interest; or
(b) the continued operation of any other restriction not materially different from the said restriction and contained in an agreement to which Part I of the Act of 1956 applies would become impracticable or would no longer have such results

unless in any such case the Registrar adduces prima facie evidence of a material change in the relevant circumstances since the previous decision of the Court.

(2) If on an application made under this section the Court makes an order directing that goods of any description referred to in the application shall be exempted goods for the purposes of this Act, then for the purposes of section 7(3) of this Act the decision in the previous proceedings under Part I of the Act of 1956 shall be treated as the previous decision of the Court.

(3) If on an application made under this section the Court refuses to make an order as aforesaid, then no further application may be made under this section in respect of those goods but, subject thereto, goods of that description shall be treated for the purposes of this Act no differently from goods in respect of which no application under this section has been made.—[Mr. Stevens.]

Brought up, and read the First time.

4.15 p.m.

Mr. Geoffrey Stevens: I beg to move, That the Clause be read a Second time.

Mr. Douglas Jay: On a point of order, Mr. Speaker. I would like your guidance about the selection of one or two of these Amendments, which does not appear to us to be wholly to the convenience of the House.
I understand that it is the intention to take together Amendment No. 14, in the name of the Secretary of State, in page 3, line 20, at end insert:
(4) For the purposes of this Act a supplier shall not be treated as withholding supplies of goods on any such ground as is mentioned in subsection (1) of this section if, in addition to that ground, he has other grounds which, standing alone, would have led him to withhold those supplies.
and Amendment No. 15, in my name and the names of some of my hon. Friends, in page 3, lire 20, at end insert:
(4) Nothing in this section shall make it unlawful for a supplier to withhold goods from any dealer to whom he has not previously sold goods or who refuses or fails to comply with a requirement by the supplier that he shall pay cash or the equivalent of cash on order.
It appears to us that not only are these two Amendments to be moved from different sides of the House—which is perhaps not a major point—but that they raise separate issues. The Government Amendment refers to the motives a supplier might have for withholding supplies. Our Amendment deals with the different question whether the Bill should prevent a supplier from withholding supplies from a dealer with whom he has never dealt before. I submit that these are separate issues and that it would be inconvenient to take them together.

Mr. Speaker: Perhaps I may take these points one by one, so that we may get them sorted out more easily. It appeared to me that the right hon. Gentleman's Amendment, No. 15, was partly met by the Secretary of State's Amendment, No. 14. I think that we can conveniently discuss them together, if that is so, without queering anyone's pitch. I can, if necessary, call No. 15 for a separate Division. It would merely group the discussion but if my suggestion is not convenient I will retreat from it.

Mr. Jay: Thank you, Mr. Speaker. We would prefer to take the two separately.
My second and more substantial submission concerns Amendment No. 26, in the name of my hon. Friend the Member for Ogmore (Mr. Padley) and the names of others of my hon. Friends, in page 5, line 34, at end insert:
or
(e) there would be serious damage to the livelihood of large numbers of self-employed retailers and distributive workers".
I understand that it is not intended to select this Amendment. However, it is a major Amendment which seeks to ensure that the interests of the retailers and the distributive workers are at least taken into account in deciding on exemptions from the Bill. This would have been the only point at which we could argue that the interests of retailers and distributive workers should at least be considered.
As this issue affects a large number of people, surely we should at least be allowed to argue it on the Report stage, whatever view the House may take in the end. I realise that there was a debate in Committee, but this Amendment is in different terms from the one moved then. Since the interests of shopkeepers and retail workers are concerned, and this Amendment is in different terms from that moved in Committee, we hoped that we would be able to debate it.

Mr. Speaker: There is a difficulty about this. The Chair has the unfortunate duty of having to select. One of the purposes of selection, presumably, is to prevent a repetition of matters which, in the view of the Chair, have been adequately discussed in Committee. I realise that there is a slightly different wording in Amendment No. 26, but it is impossible, in my view, to say that there was not adequate discussion of a similar Amendment in Committee. That discussion lasted 1½ hours at least and the issue was carried to a Division. I do not ordinarily declare my reasons. I do so in this case as a matter of courtesy to the right hon. Gentleman. Is that all that he desired to raise with me?

Mr. Jay: Yes, Mr. Speaker.

Mr. Stevens: I suggest that it might be for the convenience of the House if, with my new Clause, we discuss Amend-

ment No. 29, in page 5, line 39, at end insert:
(2A) On a reference under this section in respect of goods of any class which have been the subject of proceedings in the Court under Part I of the Restrictive Trade Practices Act 1956 the Court may treat as conclusive, against any person who was party to the proceedings under the said Part I, any finding of fact made in those proceedings, and shall do so unless prima facie evidence is given of a material change in the relevant circumstances since those proceedings;
and Amendment No. 47, in page 8, line 20, leave out from beginning to end of line 21 and insert:
of the following costs incurred by any other party, that is to say—

(a) costs incurred on a reference under section 5 of this Act, or on an application under section 7(1) of this Act, in respect of any issue determined in favour of that party, being an issue which in the opinion of the Court substantially corresponds with an issue so determined in proceedings under Part I of the said Act of 1956; or
(b) costs incurred on an application under section 7(2) of this Act in respect of an issue determined in favour of that party".


Though these two Amendments concern different Clauses, they both touch closely upon the subject matter of the new Clause. I should like your guidance on this, Mr. Speaker.

Mr. Speaker: I cannot group the Government Amendments without Government consent. In the circumstances they will have to be separately dealt with. I should welcome help.

The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath): I should be quite happy for the Amendments to be discussed with the new Clause.

Mr. Speaker: So be it. Let them be discussed together. The Amendments can be called for a Division later, if necessary.

Mr. Stevens: The object of the Clause is to ensure that trades which have already been through the hoop of the Restrictive Trade Practices Act, 1956, appeared before the Court and proved that their schemes for price maintenance are in the public interest, should not, in the first instance, under the Bill, be required to go through the hoop again.
In Committee, we had a short but interesting debate on this point. My


right hon. Friend accepted that there was substance in it. He could not accept the Amendments then moved, but he undertook to table Amendments to deal with this point on Report. My right hon. Friend has done that by tabling Amendments Nos. 29 and 47. I very much appreciate what he has done. I cannot at this precise moment say that I am entirely satisfied. There are one or two points on which I should like clarification.
I shall not weary the House by going over old and stale ground. In Committee, my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) and I drew attention to the very large sums of money which these companies and trades have spent in preparing their case for presentation to the Court. I do not think that the amount of time involved was referred to. I think that I am right in saying that both the book and the cement trades spent about three years preparing their case. Those trades may be put to the same trouble again, even though their cases may not be taken by the Court if Amendment No. 29 is accepted. The moment the Registrar makes a reference to the Court those trades will have to start marshalling the facts for their case straight away. I should like to hear what my right hon. Friend has to say on that point.
There are two assurances I should like from my right hon. Friend. I rather think that it is what he intends, but I am not sure that the wording of his Amendments is sufficiently clear. First, I should like his assurance that Amendment No. 29 is definitely intended to save in the first instance the three trades—cement, books and window frames—which have already been through the hoop from coming up before the Court again under the Bill. Secondly, I should like from my right hon. Friend an assurance that the intention of Amendment No. 47, dealing with costs which may be incurred, is to insure these same trades against costs which they may incur on a subsequent reference.
I hope that, if my right hon. Friend can give those assurances, it will not be necessary to stage yet another Tory rebellion.

Mrs. Eirene White: I should be glad to hear from the Secre-

tary of State just what his Amendments include, particularly Amendment No. 47, dealing with costs. If costs are defined, as one would suppose them to be, in the narrow, legal sense, although it would certainly be a great help to those concerned presumably it would not cover all the work which has to be done in preparing a case—all the work done in the offices of the companies and all the overheads which would be part of the general costs if they had to prepare their case a second time.
It is true that, in accordance with Amendment No. 29, evidence which has previously been placed before the Court under the 1956 Act can be accepted. As I understand, under the right hon. Gentleman's proposals there may still be a considerable amount of labour, to-ing and fro-ing, spending of time, and telephoning involved. I can think of all the ancillary, expenses which might be incurred, which it seems to me would not rank as costs in the legal sense and therefore would not be reimbursed.
If my thinking on this is incorrect, one could accept without too much difficulty the two Amendments in the name of the Secretary of State. On the other hand, if my view is correct, the new Clause would be far more satisfactory. The people concerned—I am much more interested in the books than in the other commodities—have already spent nearly £40,000 and nearly three years on the preparation of their earlier cases. Under the new Clause they would be perfectly clear that they would not have to do all that work again. If the Government Amendments were accepted, I do not think that it would be anything like as clear that they would not have to do a good deal of work again. I should be grateful for clarification.

Mr. Graham Page: I think that it is generally agreed that those who have been through the hoop before under Part I of the Restrictive Trade Practices Act, 1956, should not be forced through the hoop again. The new Clause and Amendment No. 29 are alternative ways of achieving this. I shall address my remarks to the difference in practice between the procedure which would follow under the new Clause and that which would follow under Amendment No. 29.
My hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens) said that there are three trades which have been through the hoop once—the publishers of books, the makers of cement, and the makers of metal windows. They have already had a decision of the Court that their conditions of sale are not detrimental to the public interest. Those conditions of sale will, as they include a price-fixing agreement, become void when the Bill becomes law and Clause 1 becomes operative.
The first step which those trades will have to take is to give notice under Clause 6 and become registered. They will then, by Clause 6(4), get the usual implied temporary exemption order under Clause 5. This is the point at which the new Clause procedure and the procedure under Government Amendment No. 29 part company. Under the new Clause the trade would be entitled to apply for an exemption order. The trade would take the initiative. Under Amendment No. 29 the trade would have to wait for a reference by the Registrar. The trade would have hanging over its head the possibility of a reference, perhaps not for a very long time, because it would be unlikely that the Registrar would pick on one of these trades at the early stages of the operation of the Bill when enacted.
Under the new Clause, if there were prima facie evidence of a material change in the circumstances, that would merely defeat the initial application and the trade would wait until a reference is made. Under Amendment No. 29, if there were prima facie evidence of a material change, all the facts previously proved and all the issues previously settled would be thrown into the melting pot again.
This is the practical difficulty which will face these trades, for they will face a reference. At the outset the trade may succeed in saying, "There is no material change in the circumstances" and, therefore, that will be the end of the matter. On the other hand, the trade may fail at the outset and the Registrar may satisfy the Court that there is prima facie evidence of a material change in the circumstances. This shows that the trade will have to be ready to proceed in full with a

reference. If it succeeds on a preliminary point, there will be no reference—but the trade must be ready at the outset to proceed with the case in full.
4.30 p.m.
I have tried to show that, in the circumstances, the trade will have to go through all the preparation which my hon. Friend the Member for Langstone mentioned. As he said, it took the book trade three years to prepare its case. The procedure of deciding this preliminary point on an application seems far preferable. If my right hon. Friend's Amendment No. 29 is accepted, however, perhaps I might commend to him the procedure which comes into the Bill a little later—of leave of the Court, before proceedings are started. That might be a solution in this case.
If Amendment No. 29 stated that the Registrar should not be entitled to commence a reference with the leave of the Court, without satisfying the Court that there is prima facie evidence of a material change, then the Amendment would embrace the advantages of the new Clause; of that preliminary decision on a short point before embarking on the whole of the case.
The object of the proposed new Clause is to prevent the expense of preparation for this sort of reference all over again, when it has gone through the hoop once. Amendment No. 29 will not entirely achieve that and I would, therefore, urge my right hon. Friend to think again on this issue and consider covering this point, perhaps in another place.

Mr. Donald Wade: Most of my remarks will be in the form of comments on the observations which have already been made. I am, however, not completely clear about the timetable and I am in favour of any Amendments to the Bill which will simplify and speed up the procedure which it lays down.
This procedure may be lengthy and complicated and it is sensible that we should try to shorten it, particularly for trades which have already been before the Restrictive Practices Court. We read, in Amendment No. 29, that
…the Court may treat as conclusive, against any person who was party to the pro-


ceedings under the said Part I, any finding of fact made in those proceedings, and shall do so unless prima facie evidence is given of a material change in the relevant circumstances since those proceedings.
The point which is worrying many hon. Members is when a trade will know that the Court will treat certain evidence as conclusive and when such a trade will know whether or not there is any material evidence going to be brought forward concerning a material change. The timing here is important and I am sure that if a satisfactory answer could be given to these questions we would stand a reasonable chance, apart from simplifying the procedure, of satisfying a number of hon. Members, most of whom are anxious that this procedure should be simplified.

Mr. Norman Cole: I am sure that hon. Members on both sides of the House are pushing at an open door in our discussion of these Amendments and the new Clause. What we need to know is what is on the other side of that door. I have carefully read the Clause and my right hon. Friend's Amendment No. 29 and I see several differences in them, at least one of which has not been mentioned.
The new Clause deals inter alia with the result of a decision made under the 1956 Act, and because that decision was made at that time an exemption under this Act must now be given. That, in effect, is what the new Clause says and, for that reason, I call it the "result" aspect of our discussion. Amendment No. 29, on the other hand, deals with the actual case and states that, whatever has been proved already, as a matter of fact, that must be taken into account by the Court. Is there not room for both of these considerations? If we call Amendment No. 29 the "actual" aspect of our discussion and the new Clause the "result" part, cannot we say that there is much to commend both aspects?
It seems obvious that if the 1956 Act resulted in a decision having been made, the very same issue over which that decision was made should not have to go before more or less the same Court simply because it is said that something is possibly against the public interest from the supplying or manufacturing point of view. We should not be

allowed to invalidate a previous decision by stating something in this Measure.
I am also concerned about the circumstances of a r.p.m. case coming before the Court when a previous statement of fact applicable to that case has already been made. This really covers the "actual "aspects of both matters and I would go so far as to say that the words used in Amendment No. 29 on this issue and those used in the new Clause should be brought together to make a comprehensive whole.
Having read and reread Amendment No. 29 and the new Clause, I cannot find anything in the Amendment which would give an exemption, for it merely states:
…the Court may treat as conclusive, against any person who was party to the proceedings under the said Part I, any finding of fact made in those proceedings, and shall do so unless prima facie evidence is given of a material change…
It does not say anything about giving an exemption for that reason and we cannot say that if we accept the Amendment such exemption will be given. I have react that Amendment into where it will occur in the Clause, but I cannot find that it would make much difference, from the exemption point of view, to the Clause as already drafted.
I want to make certain that someone who has been through the hoop once will not have to go through it a second time and, where there has not been any change, will not be placed in jeopardy. Although this is not a criminal matter, it is inherent in our criminal legislation that a person should not be put in jeopardy in this way time and again. I go further, because it is not merely a question of jeopardy. We are here concerned with the deployment of a great deal of time and money for people to be ready with their cases.
We should not forget that it is only eight years since these people will have gone through the hoop for the first time. Public interest cannot have changed all that much in that time. Changes do occur over a considerable period, but what we are considering now is like retrospective legislation. It is rather like saying that once the Bill becomes law something which was decided some time ago, when a person or trade was


given a clean bill of health, will have to be referred for decision a second time in the public interest merely because someone else has taken a different view. For this reason, this procedure has all the demerits of retrospective legislation and, because of that—apart from other points which I dislike intensely—I hope that my right hon. Friend will have second thoughts on this issue. He should particularly remember that the Clause will suggest that a person who has been before the same kind of court to have the same set of facts considered will need to go before it a second time.

Mrs. White: Although the hon. Member mentioned that the first decision was made only eight years ago, he will realise that it could have been given as recently as 1962.

Mr. Cole: That reinforces the point which I was making. I was assuming the maximum reason for obliging the organisation to go through this inquiry twice. If it is only a matter of two or three years ago that an inquiry was held, then it becomes nonsense to make people go through it twice. It is like trying an ordinary civil case twice in two or three years. This we would not do.
Quite apart from the general feeling of jeopardy and from the money and time involved, all of which are major considerations, we ought to bear in mind that whenever there is a suggestion that someone must appear before the Court again, even if he has reason to know that he will be cleared as on a previous occasion, there is immediately uncertainty in that trade or industry. That is not good for the country. It may well be an industry involved in exports. Such a practice would be a bad thing both for the industry and for those who deal with it
Nowhere in Amendment No. 29 or the new Clause is there a suggestion of a time limit. I am surprised about this, because there are references to time limits elsewhere in the Bill. Although the Court may make a decision based on new Clause 1 or Amendment No. 29, there is nothing as far as I can see to prevent the Court from reconsidering the matter within 12 months. I am all in favour of the Court reconsidering a matter if material changes in the circumstances

have been brought to its notice, but I do not see why someone should be permanently exposed to the glare of the Court under the same circumstances.
If that is not the intention, we should put a provision in the Bill, "Subject to any material change in circumstances, the Court shall not review any trade in a period of less than five years". With all the work which the Court will have to do, that will not be too long a period. I am anxious that an industry or trade should not find the Sword of Damocles hanging over its head all the time. I am in favour of inquiries into industries and trades where things are not going as we think they should; they should be subject to investigation and should be looked at again, but there are large parts of industry which satisfactorily meet these judgments of the court in what they do, and they should not be exposed continually to these investigations.
It can do nothing but harm. It is rather like the period in industry before a major national event. Once the industry has been cleared, then, in the same way as someone found not guilty of a criminal offence, it should be certain that unless circumstances change in its line of country, it will be clear for at least the next five years and probably longer than that.
With new Clause 1 and Amendment No. 29 we probably have the answer to our problem, but it will need very careful wording. This is probably one of the three major parts of the Bill. It may be a little more difficult to solve because we are all after the same thing, but I hope that my right hon. Friend will consider the analytical remarks which I have made, because I am sure that we all want the best result and that we shall get it if we bring our minds to bear on the new Clause and the Amendment and bring them together.

4.45 p.m.

Mr. R. T. Paget: I find myself very much preferring the new Clause to the Minister's suggestions. If there is to be a justification for the Bill, it is in promoting efficiency in industry, and to promote complex and difficult legislation and to impose that on an industry is not the best way of making it more efficient.
In the three cases which we have heard—cement, books and metal windows—


probably those industries have had imposed on them, directly or indirectly, several hundreds of thousands of pounds worth of totally unproductive expenditure. Nevertheless, I believe that to be very much the least important aspect. What they have had imposed on them and upon their highest directorate is a diversion of energy and thought.
I do not think that the right hon. Gentleman, who takes this doctrinaire attitude about these matters, realises the extent to which a directorate who find themselves involved in major litigation are more and more occupied in consultations, in producing new documents and in the extremely difficult task of trying to make the business which they understand comprehensible to men none of whom understands their business or business generally—and that is a position of a judge.
Here is the appeal from people who know the business, who have created it, who understand it and who have built up its distributive organisation, to a man whose training is not in business, who is in no position to understand it and who is in no position to make economic prognoses of the probable future.
The judge's job is to judge facts and to make findings of fact on existing circumstances; it is not to guess the economic future. He is quite unfitted and inadequate to do so. The job of having to create this state of affairs in the mind of a judge will divert the energies of those companies to an extraordinary degree. Probably the top directorate in these industries over these three years were occupied for nearly all their time in this wretched litigation, which they had continually to be applying their minds to, and in getting new evidence. Surely it is not reasonable to impose it on them again. We ought to have learned the lesson from the Restrictive Trade Practices Act, which produced great advantages to monopolists and great opportunities for take-overs. Quite a few large people found themselves reluctantly having to swallow their smaller competitors. In almost no instance at all can we trace any advantage having been passed to the consumer from these inquiries. We should not impose all this trouble on these industries all over again.
Yet they are to have the inquiry hanging over them, and we are told that there is some compensation in the costs provision. The costs provided do nothing to compensate for the diverted energy and, as anybody who has been involved in litigation of this sort knows, they are only a trivial proportion of the actual cost. This seems to be totally unfair, and I very much hope that the Government will reconsider the matter and will accept the new Clause as some mitigation of this litigation situation.

Mr. A. Oram: We are discussing two distinct approaches to the subject of how to take into account the proceedings of the restrictive Trade Practices Court. I disagree with the hon. Member for Bedfordshire, South (Mr. Cole), who seemed to think that in some way the new Clause and Amendment No. 29 were compatible and that we could have both with some modifications.

Mr. Cole: That is a way of explaining it and the hon. Gentleman may be right, but what I meant was that we could take from both to produce something which would be much better than either.

Mr. Oram: I also disagree with that interpretation of what the hon. Gentleman said.
Unlike my hon. and learned Friend the Member for Northampton (Mr. Paget), I prefer the Government's approach to that of the new Clause. I recall that when my hon. Friend the Member for Wednesbury (Mr. Stonehouse) introduced a Private Member's Bill on this subject, he included a provision somewhat similar to new Clause 1, that is, to exempt goods which had already been through the hoop. In that limited Bill, my horn Friend was trying to legislate for exemptions direct and he was not proposing to adopt procedure of this Bill, sending cases to the Restrictive Practices Court. I was a supporter of my hon. Friend's Bill, but in the context of this Bill we have to reconsider the matter, and I prefer the Government's approach.
It is perfectly reasonable that when a matter has been closely examined by the Court, all those proceedings should be taken into account; but if it is good to do that in the cases in which the practices have been approved by the Court, what about those cases which the Court has not approved? Are they to be set


aside and given a completely new approach? If the work of the Court is taken into account on the one hand, it must also be taken into account on the other.
Hon. Members have mentioned the expense involved and the amount of inconvenience suffered, and so on, but let us remember that it is not only the traders and the trade associations which have been put to this bother. The Registrar and his staff have also been involved and public money has been expended in stating the other side of the case. When they have won the case, ought that not to stand in good stead and ought not a repetition of those costs and that inconvenience be avoided just as much as in the case of the booksellers, whose case I largely accept? Hon. Members cannot have it only one way.
The Government's Amendment provides a reasonable formula in that it refers to any goods which have been subject to proceedings. It does not say whether those proceedings have been successful from either point of view. It merely says that when goods have been subject to proceedings the findings of fact shall be taken as conclusive. I think that this reasonably holds the balance between the two sides of the argument and avoids repetition of argument, repetition of evidence and expense, and so on, whatever the case and arguments which were before the Court at the time.

Mr. Cole: I agree with much of what the hon. Gentleman says, but he will appreciate that the 1956 Act did not make resale price maintenance wrong. In fact, it allowed it to go on, so that in that respect what has happened in the Restrictive Practices Court does not apply.

Mr. Oram: But the Court will have examined such issues before reaching its decision. What I am saying in support of the Minister's suggestion is that it is six of one and half a dozen of the other, and that what is fair in the one case must be seen to be fair in the other. The new Clause seems to weigh the scales entirely in favour of the traders and trade associations and against the Registrar and his staff, where-

as the Government's formula keeps an even balance.

Mr. Jay: Having listened carefully to the debate, I am inclined to think that the issue is not quite so simple as it was put by some hon. Members opposite. In the first place, there is a great deal in what my hon. Friend the Member for East Ham, South (Mr. Oram) has said—that if we are to accept the previous decision of the Court in one direction, we are surely bound in fairness also to accept it in the other.
Secondly, we all start with the general desire not to force industries or interests or groups to go through a long and complicated and costly legal procedure twice over in order to reach the same effect. Hon. Members, naturally, ask why people should be forced to go through the hoop twice. The weakness of that argument is that it is not the same hoop. That is the difficulty. It is a different hoop in two respects. First, what is required to be proved is different. Under the 1956 Act, the publishers and the others were seeking the right to retain collective agreements. It was the collective nature which was at issue.
As the hon. Member for Bedfordshire, South (Mr. Cole) correctly said—although this seems to incline against his own argument—at that time resale price maintenance was not illegal, whereas under the Bill it will have to be proved to be in the public interest if it is to be enforced, not collectively, but individually. Therefore, what is required to be proved is different. Whatever gateway we finally reach, the criteria by which that matter will require to be proved will also be different. It therefore seems clear that this is a materially different hoop in two respects.
I cannot believe that it is right to legislate to the effect that any industry or trader who happens to gain exemption, or who has been refused it, on one ground under a previous Act should automatically get if for a different Act when other people who have not been before the Court have to prove their case on new and quite separate grounds. This would give different industries and different traders inequality, because some would be automatically exempted without having to prove what others would be required to prove.

Mr. Cole: I am very much taken with this part of the right hon. Gentleman's argument, but the new Clause says that, if something approved by the Court under the 1956 Act was unworkable unless the maintenance of resale price maintenance were allowed, exemption should be given. It does not say that exemption will be automatically given just because the matter has been before the Court.

Mr. Jay: But we are now instituting a different criterion, that of the public interest.
5.0 p.m.
However, I think that we want to ensure that traders are not compelled at the cost of great time and expense to prove the same facts over again. As I understand, the Government mean to ensure that, so far as the facts have been proved and so far as there has been no material change, the onus of proof being on the Registrar to say if there has been a material change of facts, the process of proof does not have to be repeated. It seems reasonable that, up to a point, the costs of the whole operation should not be imposed twice over on at any rate those dealers who are able to make their case.
As I understand the right hon. Gentleman's proposal on costs, it is to the effect that in so far as the issues coincide in the judgment of the Court, and in so far as the case is made in the view of the Court, the costs will be borne by the Registrar. If I am right in my interpretation of the Government Amendment in both those respects—and I am sure that the right hon. Gentleman will elucidate them—on the whole I prefer the Government solution to that put forward by hon. Gentlemen opposite in the new Clause.

Mr. R. J. Maxwell-Hyslop: I am afraid that quite a lot of apparent confusion has stemmed from a rather unfortunate speech made by my right hon. Friend the Secretary of State for Industry and Trade when, either accidentally or deliberately, I do not know which, he used the words "price-fixing" in a completely new context. That phrase has consistently been used by the Restrictive Practices Court to describe collusive agreements between manufacturers who ought to be in competition with each other.
My right hon. Friend introduced that phrase, and sections of the Press which should have known better, then followed down his faulty lane and applied that distinct and technical term to a completely different situation, namely, resale price maintenance. Without doubt that has confused the public, and it appears to have confused some hon. Members. I think that it is essential that we should distinguish between price-fixing, a term whose meaning is well established by the Court, and resale price maintenance, which is totally different and which governs only the relationship between an individual manufacturer and a supplier of that manufacturer's product. As long as we retain that distinction, confusions of this nature are not likely to arise.
Having said that, I think that the merit of the new Clause is quite clear, because, although these two phenomena are utterly different and distinct, that does not mean that the existence of one may not impinge in some way on the other. This is brought out in paragraphs (a) and (b) of the new Clause. There may be circumstances—and it would be for the Court to decide whether to accept the evidence put before it—where restrictive practices which are found to be in the public interest depend on resale price maintenance being continued.
That is a possible circumstance which the new Clause encompasses. It would obviously frustrate the purpose of the Court if that Court found that a certain arrangement was in the public interest, and that arrangement was then defeated by alternative proceedings under the Bill, because one would then be in the ludicrous position of having one judge in the Court finding that a certain process was against the public interest, although that process was necessary to sustain another process which either the same or a different judge in the Court found to be in the public interest. If we allow a situation like that to obtain, we shall reduce the whole procedure to the contradictory and farcical.

Mr. Jay: As the Bill does not repeal the 1956 Act wholesale, it is inevitable that different criteria will apply for collective price-fixing on the one hand, and resale price maintenance on the other. That is true not only of an industry which may wish to practice both at once.


That is the inevitable effect of the main principles of the Bill.

Mr. Maxwell-Hyslop: I am seized of that point, and I accept that where r.p.m. is not—as, in many cases, it is not—in any way impinging on other forms of restrictive practice there is no reason why the criteria should necessarily be the same, but paragraph (a) of the new Clause deals with cases where one impinges on the other.
It is in cases where the one impinges on the other that this utterly contradictory situation, which I am sure the House would want to avoid, may occur. It would be ridiculous if the same judge, or different judges in the same Court, found that something was in the public interest, or alternatively, found that something else was not in the public interest, but whose existence was essential for something which was found to be in the public interest.
That is the essential point which must be grasped by the House, although I come back to where I started by agreeing with the right hon. Member for Battersea, North (Mr. Jay) that we must not confuse these two totally different situations by using the accurate and restrictive term "price-fixing" to encompass as well a totally different situation—resale price maintenance.

Mr. Cole: I am sure that my hon. Friend realises that because of the existence of different criteria under the Bill we may well get what he calls a ridiculous situation in the same industry.

Mr. Maxwell-Hyslop: It is that aspect of the matter which particularly recommends the new Clause, because it allows us to escape from that dilemma and it enables us to avoid legislating for a nonsensical situation.

Mr. Heath: A very similar Clause to this new Clause was considered in Committee, and at that time I explained some of the difficulties involved in it. I undertook to see whether we could find a way round them, and we have given very careful consideration to all the points which were raised by my right hon. and hon. Friends, in an endeavour to meet the problems which I mentioned.
The new Clause which we are now considering is, in fact, a recast version of the original one which we considered in Committee, and I recognise that the sponsors of the new Clause have tried to meet some of the objections which we saw in the new Clause moved in Committee. They have spelt out its intention more clearly, and they have limited its application to cases decided under the 1956 Act before the Bill becomes law.
They have also limited it so that it no longer applies to cases where r.p.m. has been considered by the Restrictive Practices Court simply as a specific restriction supporting another principal restriction in the agreement, in other words, those cases which came under gateway (g) of Section 21(1) of the 1956 Act. That means, in effect, that the new Clause can now relate only to the net book agreement, and one of our objectives in dealing with this matter was to deal with the three cases which had been before the Court—the net book agreement, cement, and metal windows.
As a result of this new Clause, publishers would merely have to show that individual r.p.m. was an essential element of the restriction in the net book agreement which the Court has already approved. That agreement would then be exempted, unless the Registrar could bring prima facie evidence to show that there had been a material change in the relevant circumstances since the previous decision.
When we discussed this before, I think that we were agreed that we were not trying to secure exemptions for those three cases. They were not put forward when we dealt with Clause 1 for specific exemption, as were a number of other goods. My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) and my hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens) said specifically that they were not asking for exemption in perpetuity for those three cases, or even for the net book agreement. They felt that it should be subject to review.
I point out to my hon. Friend the Member for Bedfordshire, South (Mr. Cole) that under the 1956 Act there is provision for review. His anxieties—that in this case the possibility of review


would be constantly hanging over the heads of those concerned—are not entirely justified, because this provision already exists in the 1956 Act as it does in the Bill, in circumstances in relation to which I am later proposing an Amendment.
Despite the changes made in the new Clause, one fundamental difficulty remains. It is one to which we have given a good deal of thought, but we have not found a way round it other than in the Amendments that I have proposed. It is concerned with the question that the Court should be free to review an exemption order for books, cement or metal windows, in exactly the same way as if the normal procedure in the Bill had been followed. That is the legal difficulty which faces us in trying to deal with this problem.
My hon. Friend recognises that it is not possible to dispense with the requirement for an exemption order under the Bill if the goods are to be subject to the review procedure under Clause 7. Clause 7 requires the parties to obtain an initial exemption order under the Bill, but under this Clause the exemption order will be automatic, and will not involve any treatment of individual resale price maintenance on its merits under the Bill—that is, by consideration of the gateways under Clause 5.
The whole idea of the review under the Bill is that the merits of the decision will be reconsidered. In that way it is no different from the review under the 1956 Act, so unless the goods go through the gateways in the Bill there is nothing on which the review itself can bite. This is the fundamental problem that faces us if we have automatic exemption. When it comes forward again under review there is nothing which can be reviewed, because there has been an automatic exemption.

Mr. Cole: I have listened to what my right hon. Friend has said with great respect, but is it really true? It comes under Clause 7(3). It means that automatically, at the end of two years, it must come up for review. Surely the whole thing then starts again. I am not talking about material changes, but about the application of the gateways under Clause 5.

Mr. Heath: With respect, that is the point that I am making. It cannot start again, because it did not start in the first place; there was an automatic exemption. There can be no circumstances for review by the Court, because no circumstances have been put before the Court. This is the fundamental problem which the new formulation of the Clause fails to meet. We have, therefore, had to find other ways of dealing with the question.
The new Clause recognises this difficulty, because it provides for a review not of the order but of the decision on which it was based, namely, the decision under the 1956 Act. Again, the problem is that under the Bill we cannot have a review of a decision which has been taken under another Act. This is the second aspect of the problem with which we have to deal in trying to find a solution.
I hope that I have explained to my hon. Friend the fundamental difficulty with which we have been faced in trying to find a helpful solution to these three cases. I could not accept the Clause in any case, because it is limited to the net book agreement, and we were trying to find an arrangement which would deal with the three cases which were before the Court.

Mr. Paget: Surely the 1956 Act itself provides for a review, as the right hon. Gentleman has said. Is not that the answer to the objection that he has just put forward? The correct thing is not to proceed under the Bill while the 1956 Act ruling holds good; it is to apply for a review under the 1956 Act, if the Government no longer like it.

Mr. Heath: Not in the least, because the 1956 Act is concerned with collective price maintenance, as the right hon. Member for Battersea, North (Mr. Jay) rightly pointed out. In any case, to follow that procedure would be to take these items completely out of the sphere of the Bill, and that is not what was urged generally in Committee—nor do I think that it is the wish of the House that that should be so. If it had been so, no doubt these items would have been put forward for complete exemption when we were discussing Clause 1. The solution put forward by the hon.


and learned Member does not meet the case.

Mr. Paget: I am sorry to intervene again, but this is an extremely important point. Surely we cannot have collective price maintenance without resale price maintenance. Those two must go together. Therefore, if we are to upset a decision which has been made, which is that it is in the public interest that there should be collective price maintenance, the way to do it is under the 1956 Act, which provides for the review of what I would call the governing decision, which the net book people have got. It is not to introduce entirely new litigation and put all these people in peril again.

5.15 p.m.

Mr. Heath: The hon. and learned Gentleman is restating his fundamental objection to the Bill. I recognise that. But as the House is dealing with the Bill I suggest that he must accommodate these circumstances to the Bill.
We are now trying to find the best way to deal with the situation. I have, therefore, put down two Amendments. The first—Amendment No. 29, in Clause 5, page 5, line 39—provides that any finding of fact in the proceedings under the 1956 Act is to be treated as conclusive in any exemption proceedings unless there has been a material change in the relevant circumstances. The second—Amendment No. 47, in Clause 8, page 8, line 20—enables the parties to get their costs paid if they are successful. Coupled with it, from the point of view of the consideration of these items, is the new gateway on prices—contained in an Amendment which we shall consider later—which is based on the language used by the Court which exempted the net book agreement, and which was to the effect that there should be a rise in prices in general and in the long run.
That was the language specifically used by the Court as its reason for exempting the net book agreement, in respect of individual resale price maintenance. If the House accepts this gateway all three reasons put forward by the Court for exempting the net book agreement will be included in the gateways under the Bill.
When my hon. Friends are considering these points I hope that they will look at the three aspects of the Bill—first, the fact that the evidence is to be treated as conclusive in the exemption proceedings unless there has been a material change; secondly, the fact that the parties will get their costs paid if they are successful, and, thirdly, the change in respect of the gateway relating to prices. These Amendments are designed to save the parties trouble and expense. At the same time, they will enable decisions to be made on the merits of the case. This is essential if the review procedure is to operate at a later stage, if there is a material change of circumstances later on and the Court agrees that a case should be brought forward for review.

Mr. Maxwell-Hyslop: I am not sure whether this exhausts my right hon. Friend's comments on Amendment No. 47.

Mr. Heath: No.

Mr. Maxwell-Hyslop: Then he will tell us later what the costs are that will be awarded?

Mr. Heath: Yes.
A number of points have been raised by my hon. Friends and other Members in these debates, and perhaps I ought to say something in more detail about Amendment No. 29, dealing with evidence. It means that the suppliers will still go through the normal procedure under the Bill for seeking exemption, but that in those proceedings they will not have to prove the facts which they have already put before the Court under the 1956 Act. I was asked by my hon. Friend the Member for Langstone to give an assurance about saving time, and so on. I am in no doubt that the Amendment will be in the interests of the Court as well as of the parties, because it will save time.
Secondly, the Amendment is not limited to cases where proceedings under the 1956 Act are taken before the Bill becomes law. Even after the Bill comes into operation suppliers of goods which enjoy temporary exemption may be parties to proceedings under the 1956 Act in which the issue of resale price maintenance is involved. In such a case, when a subsequent reference is made to


the Court under the Bill, the provisions of the Amendment would apply. This deals very much with the point raised by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) as well as by my hon. Friend the Member for Crosby (Mr. Graham Page) about the relationship between the 1956 Act and the Bill. The Amendment that I put down will deal with cases subsequent to the three that I have mentioned and I think also with a saving in time and expense.
The second Amendment in connection with this is purely consequential.

Mr. A. J. Irvine: I have sympathy with the Government's treatment of this problem and with Amendment No. 29. I do not desire to raise any unnecessary difficulties, but is it not a real difficulty that it may be the case that at the end of the proceedings under the 1956 Act it will not be known what are the findings of fact at which the Court has arrived. It is true that the judgment of the Court will in all likelihood reveal extensively the findings of fact by it on which it based its decision on the issue of public interest. In practice, however, it is also likely that the Court will not do that comprehensively, and at the very best it may often be a matter of doubt and difficulty to know what findings of fact have occurred.

Mr. Heath: That surely is for the Court to decide on the findings of fact. It is the only way that I know in which the matter can be handled.

Mr. Irvine: The right hon. Gentleman would surely agree with me that under this Measure the Court will in all likelihood often be differently constituted. I do not follow the point that it will be for the Court to know what in the other court were the findings of fact. I suggest that there is a real difficulty here which the right hon. Gentleman's latest comments do not meet.

Mr. Heath: As I understand, it would be for the Court to decide by looking at the judgments of the previous court on the findings of fact, and I am advised that that will be the position. That is the best answer that I can give.

Mr. Cole: If I understand the hon. and learned Gentleman opposite and my right hon. Friend, what we are talking about is the statement on the findings of

fact, and I do not know that the Court would do that, particularly when the application of the appellant was ruled out as not being in the public interest.

Mr. Heath: That will not arise. I am advised that it will be possible for the Court to make its own judgment about the findings of fact. It cannot be done in any other way.

On the question of costs—

Mr. Paget: Mr. Paget rose—

Mr. Heath: I have already given way several times.

Mr. Paget: I apologise for interrupting the right hon. Gentleman again, but it is a highly important point with which we are trying to deal. In a case where the applicant is unsuccessful under the 1956 Act there may, and undoubtedly will, be a number of findings of fact. Those findings of fact might or might not be relevant either for or against an application under the Bill. Just how do we ascertain what they were?

Mr. Heath: I am advised that they can be ascertained by looking at the judgment of the Court, which the Court is fully entitled to do. It does not seem to me to present any difficulties.
On the third Amendment, the one dealing with costs, I know—indeed, I said as much in Committee—that the publishers in particular and others have spent considerable sums in defending their agreement before the Court. It was represented to us that we should go further than under the Bill to meet the expenses incurred. Therefore, I have put down this Amendment which will enable them, where successful, to have costs granted when the application comes before the Court for the first time and not only for the second time on review.
The hon. Lady the Member for Flint, East (Mrs. White) asked whether it would include the costs of preparation. I am advised that that would be the case and that these costs could be taken into account by the Court in granting costs in these cases. Therefore, I hope that this will reassure her on that point.
Two points were raised by my hon. Friend the Member for Crosby and by the hon. Member for Huddersfield, West (Mr. Wade) which can, I think, be dealt


with under the rules of the Court. I think that that would be the best way of dealing with the matter and I will see that they are taken into account when the rules are being drafted. My hon. Friend the Member for Bedfordshire, South, thought that the Amendments which I had put down were smacking of retrospection. I do not think that there is any question of retrospective action about this. We have ben trying to arrange that these matters should come before the Court in order to get the review and should be dealt with with the minimum expenditure of time and money. There is no question of granting retrospection.

Mr. Cole: I said that not to grant exemption because of past approval by the Court was smacking of retrospection.

Mr. Heath: I see the special sense in which my hon. Friend is using the word "retrospection". This returns to the point made by the right hon. Member for Battersea, North.
Then the hon. and learned Member for Northampton (Mr. Paget) and the hon. Member for East Ham, South (Mr. Oram) took opposing views as to which was the best method of dealing with this and which was the best approach. I hope that I have been able to show the House that we have approached this matter with much understanding and sympathy in order to obtain the objectives.
Because of the difficulty of having two separate Acts in the matter, and having to make provision for review, we could not adopt the procedure suggested in the new Clause. We have gone a very long way to meet the special and particular cases by the three Amendments which I have put on the Notice Paper and also by the additional gateway on prices based on the net book agreement judgment which we are to debate later. I hope, therefore, that the House will feel that commensurate with the general principles of the Bill we have gone as far as possible to meet the particular circumstances of these cases.

Mr. Maxwell-Hyslop: Before my right hon. Friend sits down, I should like to out this to him. I understand that the

actual rules governing the award of costs will be made by the Registrar rather than by an Order in Council. Will the Registrar in making those rules be under the direction of my right hon. Friend, or will there be no power at all in the hands of the House of Commons to control the rules which the Registrar makes? I think that it is most desirable that we should know that in view of the assurance that my right hon. Friend has given to the House.
Under the Restrictive Trade Practices Act the only costs which could be awarded—

Mr. Deputy-Speaker (Sir William Anstruther-Gray): Order. I hope that the hon. Member will bear in mind that he is only entitled to make one speech. A short question is in order, but not a second speech.

Mr. Maxwell-Hyslop: Yes, Mr. Deputy-Speaker, but as my right hon. Friend was about to sit down I wanted to make sure how tight was the restriction under the 1956 Act concerning costs that could be awarded and to inquire whether he had power to see that the Registrar carried out the recommendation which he had given to the House.

Mr. Heath: I understand that the rules are not drawn by the Registrar. Of course, the arrangements for costs are set out in the Bill. The rules are not brought before Parliament in the normal way, but I will see that these two points and the one which my hon. Friend has mentioned on costs are taken fully into account.

5.30 p.m.

Mr. Michael Foot: I decided to wait for the speech of the right hon. Gentleman to see whether I should be enlightened and whether it would be superfluous for me to speak at all. I am not sure whether I have been encouraged to repeat that experiment by what he has said. I tried to follow carefully the result of the decisions he has made.
It would be quite wrong not to acknowledge that if we take the three Amendments to which the right hon. Gentleman has referred together, including the most important of all—which I think is the widening of the gateway, or the addition of an extra


gateway which can affect the net book agreement particularly—it would be quite wrong not to acknowledge that they add up to a concession. It is a concession of importance, and I think that would be acknowledged by hon. Members on both sides of the House. Therefore, what we are discussing in respect of these Amendments is a mitigation of the severity of the Bill, which is bound to be accepted in that sense by those who have been critical of the doctrinaire nature of the Bill—of applying the principle of the need for abolishing resale price maintenance over the whole field. So I certainly welcome this concession.
I do not think, however, that we should exaggerate the concession, not merely because we have no need to, but because it would be wrong to mislead people about the procedure which they will have to follow. I do not think that the right hon. Gentleman was at his happiest when replying to the questions put to him by my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine) and by my hon. and learned Friend the Member for Northampton (Mr. Paget) about how a court would decide on which facts were to be excluded or not, or about which facts had been decided. We all know how successfully the right hon. Gentleman can manage this House, but I do not think that he knew the answer. No doubt he will try to find out more detail regarding the precise answer to the question, but I do not think he explained to the House how it would be decided which were the facts on which the Court had already made up its mind and which were not to be taken into account under the new procedure. If the right hon. Gentleman is doubtful about the answer to the questions from my hon. Friends, it throws doubt on the whole conception, because we are uncertain of what are the facts on which Amendment No. 29 is proposed by the right hon. Gentleman and to what extent that is a concession.
With respect to the right hon. Gentleman, I do not think he could answer the question put by my hon. and learned Friends. My hon. and learned Friend the Member for Northampton asked how a new court which had to decide under the provisions of this new Measure

could make up its mind which facts had been accepted by another court under another procedure. I do not think that has been explained. I hope that the Attorney-General will assist us in this matter and explain exactly what is the point and exactly what is the nature of the concession which the right hon. Gentleman claims that he is making in respect of Amendment No. 29.
That is what I meant when I said at the beginning of my remarks that I was not sure whether the right hon. Gentleman had enlightened me. His Amendment appeared more attractive before he spoke than afterwards. Before he spoke, I thought that he was carrying out the intention—I am sure that he was trying to do so as honestly as he could—which he announced to hon. Members during the Committee stage discussions. After he had spoken, I thought we were pretty well back to "square one". Therefore, we need the assistance of the Attorney-General to extricate us from the humiliating position to which we have been returned. The more the right hon. Gentleman attacked the Amendment moved by his hon. Friend the more attractive the Amendment appeared to me. What were the two counts which the right hon. Gentleman made against the Amendment, or the two main counts against it? His first charge was that while the net book agreement would get through under the terms of the Amendment moved by his hon. Friend, the cement and metal window industries might not be able to do so. That does not appear to me the most damning objection to that Amendment.
We have had the argument before, but it is perfectly proper that this House, a Minister or anyone else, should say that books should be treated differently from other forms of wording, that the printed word should be treated differently, as it affects the whole question of free speech, debate and argument throughout the land. With respect to the cement makers and those who make metal windows, I do not think they are in the same line of business. Therefore, it is perfectly proper to try to draw a distinction. The right hon. Gentleman said that the Amendment has the demerit that it would let through only the book agreement. But


that does not seem to me an overwhelming argument against that Amendment.
His second objection is even less powerful. He says that under the procedure laid down in the Amendment the publishers—since they are the only people who would be able to get through—would have an automatic exemption. I do not object to that either. I do not think that there is anything wrong with it. My right hon. Friend the Member for Battersea, North (Mr. Jay) thought that it would be unjust to treat those who are to come before the Court later differently from those who have had the advantage—as it would be if they could get through under the terms of this Amendment—of appearing before the Restrictive Practices Court earlier. I think that the injustice is the other way round. It is those who have appeared before the Court and had to pay all the money to present their case—and who won in that Court—who will have to go through a second trial, as it is. Even though the right hon. Gentleman proposes to meet some of their costs, I think it has been proved conclusively that he will by no means be meeting all of the costs. It seems to me, therefore, an injustice which is imposed upon—as it happens, and as we understand under the operations of this Amendment—the one trade, the publishing trade. Therefore, from the right hon. Gentleman's own argument I cannot see why he should not accept his hon. Friend's Amendment. He could have had his own Amendment as well. As I understand it, they would not conflict.
According to what the right hon. Gentleman has himself said, if we voted for the Amendment the only trade which would have the possibility of getting through would be the net book agreement. Therefore, we should be voting whether we wish to see the automatic exemption of the book trade from the provisions of this Bill. I should be happy to vote for that, and I think every hon. Member would be happy to do so. As I understand the right hon. Gentleman, it is his intention to try to ensure that the net book agreement shall go through, as it went through before. He wants that, too. So

why do not we do so by voting for the Amendment? There are no other major objections to it. The Bill would be made slightly more untidy, but if we can do a good service in the cause of freedom at the expense of a little untidiness, who cares?

Mr. Heath: If the hon. Gentleman wishes completely to exempt books on the grounds which he has stated, because they are something completely separate, I suggest that he should have put down an Amendment to Clause 1 of the Bill designed to exempt books and had that Amendment carried; but he did not do so. In these Amendments I am dealing with cases, exempt under the 1956 Act, which came before the Court on a previous occasion. The Amendments which I have put down go as far as it is possible to meet that case commensurate with this being reviewable, which seemed to be the view of the Committee at the time. The view was taken generally by the Committee, that these cases were not to have permanent exemption but should be subject to the normal review procedure. Commensurate with that, we have been as ingenious as we could to meet the case.

Mr. Foot: The right hon. Gentleman has no doubt been ingenious. The question is whether he has been right or even wise on the question of making the net book agreement reviewable. My hon. and learned Friend the Member for Northampton asked that question. Under the Restrictive Practices Act it would be reviewable. If we voted for the Amendment we should not be voting to say that never must the book trade prove its case.

Mr. Heath: It was reviewable as a collective agreement. Under this Bill it is being dealt with as an individual agreement.

Mr. Foot: The agreement gone through would be reviewable. The essential part is which of the parts are established.
I accept the reproof of the right hon. Gentleman. I did not put down an Amendment to exclude the book trade altogether. I shall learn better from his strictures. I must be more assiduous in dealing with Bills introduced by the right hon. Gentleman. We shall have


to put down more Amendments and examine his methods with greater thoroughness. It will be marked down to my discredit to the day of judgment that I did not put down an Amendment against the right hon. Gentleman's first Clause, but I might manage to get through on that auspicious day by saying that I tried to remedy the matter on Report stage. That is what we are trying to do here and now.
Therefore, the right hon. Gentleman should apply himself to the merits of the argument which, on his own showing, are these: if we vote for this Amendment, we shall have achieved a good deed in a naughty Bill. We shall have excluded books from the operation of the Bill. So far as I can see, on the right hon. Gentleman's own statement, that would be the only result of voting for his Amendment, except to gratify his hon. Friends. The right hon. Gentleman should not be so spiteful to his back benchers. When they propose an Amendment which does something good and which does not do injury to the rest of his Bill, he should be more gracious in accepting what they propose.
I think that the wisest course for the House to take would be to accept this Amendment. I agree that it introduces an anomaly into the Bill, but an anomaly which achieves a good purpose. The Bill is not such a marvellous piece of draftsmanship as all that; it is not something that by touching it one will spoil a wonderful mosaic. It was a pretty good hotchpotch even when taken out of the pigeon hole in the first place. It has had to be rushed through and hacked about in all manner of places which I will not list now, and all that we are suggesting is that we should take a simple measure here for excluding the book trade from its operation.
If we do not do so, as I have said, we shall have the advantage at any rate that the right hon. Gentleman's Amendment will have improved the Bill, but we shall be left with two difficulties, affecting particularly what I would describe as not the most important trade in the country but as one of the most important, and one without which the whole spiritual life of this country would be debased.
We are left with the situation that if we merely accept the Amendments of the right hon. Gentleman, even though they are improvements, we are left with the fact that the publishing trade will still have to spend a considerable amount of money in presenting its case afresh to the Court, and when it comes to state its case, if the lawyers advising the publishing industry study the speech delivered by the right hon. Gentleman today, they will not be able to tell their clients what they have to prove and what they have not to prove.
On the basis of clearing up exactly what the right hon. Gentleman intended to say, the Attorney-General should give us an explanation now, or I suppose that the Lord Chancellor could explain the matter in another place, although I would rather our business was conducted in this place. I hope that the Attorney-General will clear up that point, which, I think, everyone on both sides of the House will agree was left in a most uncertain state by the right hon. Gentleman. I am not criticising him severely from that point of view—he has had worse messes to clear up in the Bill than that one. Here we are only criticising him for three Amendments., which are trying to do some good and to mitigate some of the original effects of the Bill, and in that sense we congratulate the right hon. Gentleman, but we cannot understand why he did not take the even simpler course of agreeing to the excellent proposition put forward by his own back benchers.

5.45 p.m.

Mr. R. E. Winterbottom: When the right hon. Gentleman rose to answer the problems put to him, I believed completely in the Amendments which had been put down by the Government. I questioned this new Clause, but until the right hon. Gentleman joined issue with my right hon. and learned Friend the Member for Northampton (Mr. Paget) I was fairly clear in my mind that I was in support of the Government on these three issues. It was when the right hon. Gentleman explained to us what would happen as a result of the decisions of the Restrictive Practices Court under the 1956 Act that doubt arose in my


mind, and I should like to have some clarification of the issue.
As I understand it, under the 1956 Act the reference to the Court is for the collective agreement. Also, as I understand it, subject to correction by the Attorney-General, the facts on which the Restrictive Practices Court bases its decisions need not be issued but only the decision itself. The right hon. Gentleman said, in effect, that the decision under the 1956 Act of the Restrictive Practices Court would be accepted for the purposes of this Bill. That is to say the fact that a decision had been given in terms of the collective agreement would be sufficient for the purposes of the Bill.
That means that one court must have blind confidence in the decision of another court. If that is so, there is something wrong somewhere. Under this Bill, we are dealing with individual cases as distinct from collective agreements dealt with under the 1956 Act. Because of that, there may be differences in the submissions to the Restrictive Practices Court as between collective agreements and those provided for in the Bill. Some information is due to the House why the right hon. Gentleman is accepting that the decision of one court shall be binding on another court, even though it is under another Measure and for a different purpose, under entirely different circumstances.
That is the only puzzle in my mind at present. Apart from that, I was heartily in sympathy with what the Government were doing. I thought that the right hon. Gentleman had carried out his pledge to the Committee. It is only this matter of uncertainty of interpretation under the 1956 Act that gives me cause for worry.

Mr. Harold Lever: My hon. Friend the Member for Brightside (Mr. Winterbottom) was more concerned with the people who will have, or may have, to fight their case again, and he made out a very persuasive case against the injustice involved in trying some one already tried and acquitted of the new crime of monopolistic practice or price maintenance—

Mr. Peter Emery: It would be quite wrong if the hon. Member were

to begin by suggesting that this is a crime. It is not a crime, and that should be made quite plain in the Bill. It is quite wrong at this stage this we should be talking of this as being a crime.

Mr. Lever: I was using the word "crime" in a more popular sense than the books of law would use. It is treated as being against public interest, and that is something to be reprobated. I did not mean anything that we could put a man in gaol for. We could only ruin him for any offence against the Bill. We can take away his business, we can take away his assets, we can sue him for unlimited sums of money if he is in breach of any of the Clauses and some one manages to persuade the Court that great damage has resulted from that.
However, I accept the correction that, so far, even this Government have not had the courage in their demagogic exuberance as a pre-election manœuvre to brand as criminals people who try to manage their business in the time-honoured way respected by Governments of every political complexion for long enough. I must confess at once that this Government have not branded those people as actual criminals. They do not threaten them with goal—merely with ruin. If I have been guilty of any hyperbolic use of language, I apologise to the House and to the hon. Member.
I confess that I have not heard the whole of the debate, so I do not want to traverse a matter that has been adequately dealt with, but I am greatly troubled about the Amendment which reads:
(2A) On a reference under this section in respect of goods of any class which have been the subject of proceedings in the Court under Part I of the Restrictive Trade Practices Act 1956 the Court may treat as conclusive, against any person who was party to the proceedings under the said Part I, any finding of fact made in those proceedings, and shall do so unless prima facie evidence is given of a material change in the relevant circumstances since those proceedings.
The Minister was asked how we were to know what were the findings of fact. He breezily and briskly replied that to get the facts we only had to read the judgment. I am astonished that any one with his training should so lightly attempt to pass off the very serious difficulty that arises in this drafting.
All lawyers who have had experience in the courts in trying to analyse the


judgments of learned judges and discover what they meant have always had the greatest difficulty in deciding what were findings of law and what were findings of fact. Does this provision mean that findings of fact, whether relevant to the final decision or not, will be binding on the party when the case comes to be reviewed again?
If the learned judge in giving judgment wandered, as learned judges tend to do, a little from what was directly material and what the parties thought was directly material, in order to animadvert somewhat irrelevantly to the proceedings, and no one bothered to contradict him, or argue with him, or adduce evidence to show that what he was uttering as firmly proved fact was merely idle speculation, does it mean that because of this loose wording what he says will be binding and conclusive against that party on another issue when it comes to be tried?
The law books are full of analyses, right up to the House of Lords—on workmen's compensation cases, for example, as to which findings of the learned judge's findings in the Court below were findings of fact. I do not know what we are supposed to make of this. Of course, we need not worry about this matter as much as we had to with workmen's compensation cases, because these issues can never go to appeal. I do not pretend to speak with any great authority here, but I understand that there is no appeal from the judge's decision. The Minister looks startled, and well he may—and if the public realised just how their rights were being whittled away they would look startled, too. Is it right that there is no appeal from the judgment of the Restrictive Practices Court? Perhaps the right hon. Gentleman will tell the House. He is obviously well versed on this. He does not come here with legislation without knowing the precise—

Mr. Heath: I am sure that I was not looking the least startled. It is well known that there is no appeal from the judgment of the Restrictive Practices Court. Perhaps I am better briefed on this than is the hon. Member, who has not been here and has been briefed by his hon. and learned Friend the Member for Northampton (Mr. Paget).

Mr. Lever: The Secretary of State is wrong. I came here to exercise my rights

as a Member of this House without any briefing from my hon. and learned Friend. The right answer to an argument is a better one—not an attempt to discredit the argument put forward against the Secretary of State by attempting to say that I was a little late in arriving. It is a rather startling development in our debates that the Minister does not seek to answer the argument but says that the man who makes the argument did not have the benefit of hearing the Minister speaking.
As to his statement that it is well known that there is no appeal, it is perfectly obvious to hon. Members that that became well known to the Secretary of State only about three minutes ago in a discussion with his right hon. and learned Friend the Attorney-General—

Mr. Heath: The hon. Member is being grossly unfair. I was not discussing that at all with my right hon. and learned Friend but something quite different.

Mr. Lever: A very serious evil is the Government's constant application to High Court judges on political questions, and that is nowhere worse than here, where there is an attempt to fix things for a long time without allowing parties to reopen the question, even though the facts found against the parties were found in a different kind of proceedings where, perhaps, different issues were involved and where the parties were not so concerned to controvert the facts as they would be if the facts were found under this Bill.
There are two evil features in this Amendment. One is that it makes findings of fact conclusive, and we are nowhere told how those findings of fact are to be adduced from lengthy judgments. There is no proper attention given to analysing which findings of facts are to be conclusive. Does the Secretary of State say that any finding of fact is conclusive whether it is relevant or irrelevant to the previous hearing? The Secretary of State laughs as though it were totally unknown for a learned judge to find a fact which was not directly relevant to the proceedings in question. Are those findings of fact conclusive? Judging by the wording of the Amendment, it would look as though those findings of fact were conclusive, too.
It seems that by the Secretary of State's Amendment we have typified all the worst evils of the Bill. We have matter that is political matter referred to a High Court judge to be decided as a question of fact. That is bad enough. I think that it was a French writer who once said that if the Almighty spoke he would speak with the words and in the tone of an English High Court judge, though I must confess that the French commentator who alleged that was of another century than this. But the Secretary of State and the Government seemed to be willing to pretend to share that view.
When the High Court judge has spoken, be it relevant or not, be it regarded by the party affected on a totally different issue as vital to them at that time to controvert or not, it will be conclusive against those parties in any future proceedings. This is a great evil, and it typifies the way in which the Bill has been brought before the House of Commons.
6.0 p.m.
It is absolutely wrong that matters affecting the fundamental rights, not the actual liberty of the subject but the freedom of the subject to carry on in the business and to remain in possession of his assets and trade practices, and the position of the subject in relation to any litigation brought because of the Bill, is made dependent upon legislation hastily got together, ill-conceived and ill-defined.
Even now I ask the Secretary of State to try to tell the House, and if he cannot to promise that he will think about tightening the wording to make it clear, how we are to ascertain from previous judgments of the Court what are the findings of fact which will be conclusive at future hearings and how we shall separate irrelevant commentary from findings of fact which are conclusive. Be it noted also that the learned judges whose findings of fact are to be conclusive were not appealable and did not know when they were finding these facts that each fact was a sacred finding, binding upon all future hearings under this Bill and affecting greatly the interests of the parties concerned. It is deplorable that the Amendment in the name of the Secretary of State should appear

in this unfair, ambigious and unsatisfactory way.

Mr. J. J. Mendelson: I was one of those many hon. Members who saw a good deal of merit in the Government Amendments, and I started out with no bias against them, but I have become more doubtful about their value during the speech of the Secretary of State. I am not so much concerned with the uncertainty which he showed on one or two occasions when he was interrupted. I am much more concerned with the two serious gaps in knowledge with which the right hon. Gentleman left us at the end of his speech.
I join with my hon. Friend the Member for Ebbw Vale (Mr. M. Foot) in saying that where it is revealed that in the opinion of the Secretary of State acceptance of a new Clause would only affect the book trade, and there is a presumption of sympathy towards that trade on the ground of public importance both on the part of the Secretary of State and hon. Members, the attitude of the Secretary of State is difficult to explain. I did not realise on studying the new Clause originally that it would apply only to the book trade and not to any of the other trades which hon. Members had in mind on Second Reading and in Committee, but I accept the case which the right hon. Gentleman has made.
The right hon. Gentleman is right on the analysis which he has given. The case is convincing. It will only affect the book trade. That being so, I cannot see why that should not affect the right hon. Gentleman's mind. I cannot understand, given the presumption of sympathy in favour of the book trade which is regarded as separate and rather different from other kinds of trade, why the right hon. Gentleman does not say, "All right, having discovered conclusively that the Clause will affect only the book trade, I accept it and will do my best to implement the principle in it."
There is another and equally important point which has been raised by a number of hon. Members. It concerns the answer which the right hon. Gentleman gave when he was questioned first by my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine) and then by my hon. and learned Friend the Member for


Northampton (Mr. Paget) as to the body of fact which will be available from past decisions under previous legislation. The difficulty in which the right hon. Gentleman finds himself is real. Anybody who knows about these decisions knows that there are a number of findings but there is uncertainty about the number of facts which will be normally available to be adduced under Amendment 29 when a new decision is taken. The House has the right to expect that when the right hon. Gentleman puts down an Amendment of this kind there should be available from the Treasury a full and clear answer to the questions put by my hon. and learned Friend the Member for Edge Hill, but such an answer was not forthcoming.
Thirdly, I can well understand, and I think that my hon. Friends who have spoken on the new Clause have pointed out, that there are some difficulties over the new Clause No. 1. I can understand that the Secretary of State may not like to add to the Gothic structure of his Bill the baroque amendment which the new Clause might introduce. If he is unfavourably inclined to accept it in its present form, there is time for a Parliamentary remedy to the situation. If he accepts the argument but dislikes the style and structure of the Clause, all he has to say is that he will appoint himself architect and bring it forward in another place to his satisfaction but embodying the principle of the Clause which will still only affect the book trade.
The Secretary of State ought to add something to the debate even after the legal enlightenment which we may receive from the Attorney-General, because there are also involved in this matter the important principles affecting the book trade which were so ably advanced by my hon. Friend the Member for Ebbw Vale. We are bound to demand explanations on these three questions before we can make up our minds how to treat the new Clause.

The Attorney-General (Sir John Hobson): Perhaps I could assist the House with a few words on the subject raised by a number of hon. Members opposite about the effect of Amendment 29 on the question of how and in what circumstances findings of fact made by

the Restrictive Practices Court in a decision given under the 1956 Act will be or may be treated as conclusive for purposes of litigation under the present Bill.
There can be only one method of discovering the previous findings of fact by the Restrictive Practices Court, and that must be from the judgments of the Court. They are all recorded in the reports of the Court. The one in which the hon. Member for Ebbw Vale (Mr. M. Foot) is most interested is the net book agreement judgment. The judgment alone in that case occupies 31 pages. If there is doubt about what is and what is not a finding of fact to be found from that judgment, it would be perfectly proper for the Court to look at the pleadings, which would be records of the same Court, to see what issues of fact emerged in relation to which the Court gave a decision on a previous occasion.
The hon. Member for Manchester, Cheetham (Mr. H. Lever) spoke about judges occasionally dropping irrelevancies and said that one might find oneself bound by obiter dicta. There is no indication that the Court is much given to such disquisitions, but if they are to be found they would not be findings of fact in those proceedings. It would be clear that they had nothing whatever to do with the issues and were not made in the course of the case.
The position is not unusual that as between the same parties—because one can only treat a finding of fact under the Bill as conclusive against a person who was a party under a previous decision—the matter has become res judicata by the same court considering its previous judgment, even if the court was then differently composed. Whilst questions may from time to time arise as to findings of fact and questions of law, this is inevitable if we are to look at the previous findings in order to avoid re-litigating questions previously litigated.
I should have thought that substantially what were questions of fact and what questions of fact were decided by a previous Court could be easily determined by looking at the judgment plus the pleadings.

Question put and negatived.

Clause 1.—(AVOIDANCE OF CONDITIONS FOR MAINTAINING RESALE PRICES.)

Mr. William Wells: I beg to move, Amendment No. 1, in page 2, line 6, to leave out "applies" and to insert "shall not apply".

Mr. Deputy-Speaker: With this Amendment it would be possible also to discuss Amendment No. 3, in page 2, line 7, leave out from "design" to end of line 20.

Mr. Wells: I think it is right to say at the outset that our main purpose in putting down these two Amendments is to obtain some insight into the Government's philosophy on the question of patented goods and of the application of this Bill to them, because I think I am right in saying that in our previous debates this matter has not been discussed. We think it ought to be discussed because it is important. Hence our raising the matter.
The effect of these Amendments would clearly be to take patented articles outside the purview of Clause 1. The Clause as drafted states:
This section applies to patented articles and articles protected by the registration of a design as it applies to other goods…
It goes on to say:
and notice of any term or condition
which comes within Clause 1, if it is void by virtue of this Clause,
shall be of no effect for the purpose of limiting the right of a dealer to dispose of that article without infringement of the patents or the rights of the proprietor of the design, as the case may be.
Then we come to the proviso, that states that nothing in this Clause
shall affect the validity, as between the parties and their successors, of any term or condition of a licence granted by the proprietor of a patent or registered design, or of any assignment of a patent or registered design, so far as it regulates the price at which articles produced or processed by the licensee or assignee may be sold by him.
As we understand the proviso, this leaves untouched any agreement as between the owner of a patent and a licensee so far as it regulates the price of the patented article—where the goods are sold subject to design—but it leaves agreement between licensees and dealers fully within the scope of this Bill. It is important to make sure that we have understood this aright. Assuming for

the moment that we have, it recalls the Amendment that we moved in Committee, in which we suggested that there might be a halfway house between avoiding agreements on the one hand and wholly exempting classes of goods on the other. In the debate on that Amendment in Committee, the right hon. Gentleman expressed disappointment that I did not explain to him more specifically what kinds of agreement, and in relation to what classes of goods, we thought this might be desirable. In fact, one need look no further, so far as we understand this proviso, than the right hon. Gentleman's own Bill to find what, in the right hon. Gentleman's opinion at any rate, is an example.
6.15 p.m.
If this case is valid for perpetuating a situation in which agreement is valid as between the parties but is outside the scope of Section 25 of the 1956 Act, may there not be others? What is the particular merit of this case? We fully appreciate that there may be very special reasons calling for the protection of patents and for their exemption or partial exemption from all the full rigours of Clause 1. But we think that some further explanation of the method that the right hon. Gentleman has chosen to adopt is called for, and though we would not anticipate deeming it necessary to divide the House at the end of the debate, we feel that this is an important matter, that some explanation is required, and we hope that the right hon. Gentleman will be able to give it.

Mr. Heath: I shall endeavour to give the hon. and learned Member for Walsall, North (Mr. W. Wells) the explanation for which he has asked on this question of patents. He will have it in mind that I am proposing to move some Amendments dealing with this matter later on the Report stage.
As the hon. and learned Gentleman said, the Amendment which he has moved would, in effect, exclude patented articles and articles to which a registered design is applied from the scope of Clauses 1 and 2. As I understand, he has raised this as an exploratory matter in order to have a discussion about the position. If this Amendment were adopted, it would be perfectly lawful to continue resale price maintenance


in respect of these goods. The view of the Government is that there is no greater case for maintaining or preserving resale price maintenance in relation to these articles than there is in the case of any other goods. Therefore, we have drafted the Bill as it is, because we are firmly opposed to making any such exemption as the Amendment would do.
Perhaps I may explain what is the position of patented goods. The position of a registered design is broadly the same. The relationship between the patentee's monopoly and resale price maintenance arises in the following way. The patentee is entitled to prevent other people from selling the patented goods except by his licence. The courts have held that the patentee can impose conditions on the granting of licences to other persons to sell the patented goods. These conditions can include conditions as to the resale prices of the goods.
If a person knowingly sells the goods at prices lower than those fixed, the courts have held this to be an infringement of the patent. This means that the patentee can enforce resale price maintenance against retailers with whom he is in no contractual relationship. He does not need the support of Section 25 of the 1956 Act to do it. He can do it simply by virtue of his patent monopoly. That is the present position. We do not see any reason why these goods should be treated in a different way from other goods, though naturally they have the procedure of the Bill at their disposal. What is important is that the patentee does not need to impose resale price maintenance conditions in order to secure his financial reward from the exploitation of his patent.
This may have been in the minds of some hon. Members, though I think those concerned with patents have understood this very fully from the publication of the Bill. The patentee can keep his monoply and fix his own selling price, or he can license another producer to manufacture the patented articles on a royalty basis. He can get his revenue or financial income in either of these cases. This, I am told, is the most common case, and in the majority of these cases the royalty is calculated on the price at which the licensee sells his goods. It is calculated not on the retail

price but on the selling price. Therefore, he does not need to have resale price maintenance in order to maintain his income. It is not a resale price. It is simply a sale price. The fixing of this price in the licence is not resale price maintenance and is not affected by the Bill.
There are some cases—I am told that they are very rare—in which the royalty is based on a resale price. I am advised that they are infrequent but may occasionally happen. This type of case can be dealt with under the Bill by relating royalty to a recommended resale price, and, therefore, if the patentee wants to maintain his income, he can do it in this way. Instead of fixing on a resale price, he fixes on a recommended price. Whether the goods are sold at that price or not does not affect the amount of revenue he gets, because he gets his revenue from the retailer fixed at that rate.

Mr. W. Wells: How does this affect an already existing agreement, where it is fixed in relation to a resale price and no provision is made, obviously, for a recommended price?

Mr. Heath: Then the resale price will become the recommended price. I understand that that is what would happen in the few cases where such an arrangement exists.

Mr. H. Lever: Why does the right hon. Gentleman say that?

Mr. Heath: Because I am advised that it will be possible to renegotiate on this basis, if the parties wish to do so, and the licence can then be related to a recommended price. This would be the normal method of going about it.
I can assure the House, therefore, that the patentee's financial rewards from the legitimate exploitation of his monopoly will not be affected by the Bill. At present, many patented goods are produced and distributed without resale price maintenance. I think that this is the answer to those who may say that we are removing one of the factors encouraging the development of inventions and their exploitation. The Bill will not affect this. I do not think that it will in any way affect the number of applications for patents.
That is the general position regarding patents as it is affected by the Bill. I hope that I have given the House a satisfactory explanation of what our intention was.

Mr. Graham Page: Could we have a little better explanation of the point my right hon. Friend made about renegotiation? If there is a firm contract for calculating the amount to which the patentee is entitled, how can he change that contract unless the Bill gives him power to do so?

Mr. Heath: As I understand it, the price is fixed in the contract, so that the obligation on the part of the person with whom the contract is made to go on selling at that price will no longer exist—unless, of course, exemption were granted by the Court—but the obligation will still exist on the person who is selling to pay the patentee the amount, so that the patentee's financial rights will remain untouched.

Mr. H. Lever: I do not wish to be unfair about it—the Secretary of State has been explicit in his explanation so far—but I should like to hear more. If there is an existing agreement in which the royalty is based upon an agreement to sell at minimum prices, it seems that that agreement, although one cannot enforce it either by the repealed Section of the 1956 Act or by the rights under the patent, will nevertheless, so far as it compels minimum prices on resale, be broken by reason of this Clause. I do not want there to be any mistake about it. The right hon. Gentleman has himself been the source of confusion by his reference to renegotiation.
When the matter was first raised with him, the right hon. Gentleman as I understood him, said that the agreement could be renegotiated. Then, in answer to the hon. Member for Crosby (Mr. Graham Page), he said, in effect, that it did not need renegotiation. He said that if I have agreed to pay 1s. or 5 per cent. on the fixed price of an article set at £1, that agreement will still stand so far as it obliges me to pay 1s. even though it will not stand so far as it obliges the enforcement of a minimum price of £1. As I understand it, therefore, no renegotiation is needed under the Clause.

Mr. Heath: indicated assent.

Mr. Lever: I see that the right hon. Gentleman is nodding his head. I take it that he is saying that there need be no renegotiation and that the contractual rights which the parties have entered into will not be tampered with by reason of the Clause, except in so far as the general law will apply forbidding the enforcement of resale price maintenance, save under the conditions set out in the Bill.

Mr. Heath: indicated assent.

Mr. Lever: I have that point. So far as it goes, it seems to me to be satisfactory.
I come now to the second point. I am very much against this Bill, but, if it is to be brought into law, I wish it to be fairly and universally applied in accordance with the intentions of Parliament. As I understand it, the Minister's intention is that patentees should enjoy no better position than anyone else in the enforcement of resale price maintenance, but if a patentee is entitled to fix any terms as to royalty that he chooses, no great ingenuity on the part of draftsmen will be needed to draft terms of royalty which would make it penal in the extreme to depart from the recommended price. In other words, if there is preserved here, as I understand from the right hon. Gentleman is preserved here, the right of the patentee to fix any terms he likes for his royalty agreement, except that he must not attempt to enforce an actual contract for a fixed price, he will be able, in effect, by careful drafting, to produce the result which Parliament intends to prevent. Although I am not in favour of the Bill, I am in favour of the House of Commons not being frustrated in its intentions, and I am pointing out to the House that bad drafting in this Clause will permit just that.
I shall give an example which occurs to me. I confess that I have not given any great thought to the matter—

Mr. A. R. Wise: Obviously.

Mr. Lever: We cannot all cerebrate at the continuously high level which the hon. Gentleman always evinces when he is on his feet or is making interjections. The wit of his remark will, I suspect, be more appreciated by himself than by others.
I want the House to consider this sort of case. A patentee decides that he


wants to enforce the sale of an article at £1. He is perfectly free to say that if the article is sold at £1 he shall have 2s. royalty, if it is sold at 19s. he shall have 3s. royalty, and if it is sold at 21s. he shall have 4s. royalty. Thus, by varying the terms of royalty in a way which is perfectly open to him, as I understand it, he can, in effect, achieve the enforcement of a resale price.
It is not desirable that the Bill should be avoided in that sort of way. I should like the right hon. Gentleman to look at the point again and tell us whether he is satisfied, in the light of the freedom which he is granting to a patentee to draft any terms he likes for his royalty, that he is not automatically giving him freedom to enforce resale price maintenance by financial sanctions of the kind which I have described.
I emphasise that, whereas I am perfectly happy to leave the law alone as it stands, I am most anxious to ensure that, if it is to be altered, it is not altered in a way which lends itself to abuse and the frustration of the enacted intentions of the House of Commons.

Mr. Jay: Is the Minister saying that, where there is one of these agreements, previously enforced, by which a royalty is based on a maintained resale price, when the Bill becomes law that will automatically, without any renegotiation, carry on as the basis of future royalties as a recommended price rather than as a maintained price? Alternatively, is the right hon. Gentleman saying that the parties will have to renegotiate the agreement on the basis of a recommended price? I was not quite clear about that.

Mr. Heath: I am advised that the contract would stand as far as payment of royalty is concerned—

Mr. Speaker: The right hon. Gentleman will require leave to speak again. No doubt, he can have it.

Mr. Heath: In that case, Mr. Speaker, perhaps I had better not speak at this stage.

Mr. Paget: I think that I quite appreciate what the right hon. Gentleman was about to say at that point. The contract would provide that the royalty should be charged on the resale price of £1 if that were to be the resale price. Under

the Bill, the resale price would be no longer maintained at £1, but this would leave unaffected the proposition that, whether the article were sold at 15s. or 10s., royalty was still calculated at £1. I think that that is what the right hon. Gentleman was seeking to say, and, with respect, I should have thought that it made sense.
6.30 p.m.
I am concerned, however, with the entirely different point of a person being faced with the problem of presenting a new article to the public for the first time. The inventor makes his invention. He makes his agreement with the supplier. That agreement, as the right hon. Gentleman has said, is normally based upon the wholesale price, the production cost or whatever it may be.
If the article is to be effectively presented to the public, in its initial stage and while it is new there may have to be a wide margin to pay for its presentation. The public has to be introduced to the new article. It might be sold in a variety of ways. It might be sold by mail order, through retailers or through one's own distributive shops, or one might be doing all three of those things.
If with the patented article a situation is created in which somebody who takes advantage of all one's advertising and presentation costs can cut the price, the whole of the presentation campaign of the new article would be undermined and wrecked. I therefore feel that the case for price maintenance, even if it does not apply generally, applies with special force during the period of presentation of a new article, particularly a patented article or a new invention. The presentation of that sort of article would be made much more difficult and this would be greatly to the disadvantage of the public.

Mr. Heath: The last point raised by the hon. and learned Member for Northampton (Mr. Paget) is a matter of judgment, but it goes further than the Amendment, which is concerned with patents and with registered designs. The right hon. Member for Battersea, North (Mr. Jay) said exactly what I would have said, as repeated by the hon. and learned Member for Northampton, that in the contract the price remains but no obligation then remains on the seller to maintain the price. If, on the other hand,


the patentee wants to issue a new recommended price and base the article upon that, he would have to negotiate it. In the case of existing contracts, however, the seller can stay on the existing arrangement, but there is no longer any obligation for the price to be maintained.
The hon. Member for Manchester, Cheetham (Mr. H. Lever) asked about abuse by a patentee in the new arrangements. It is not that in the Bill I am giving him any particular liberties which the hon. Member mentioned. They already exist. I recognise the hon. Member's point about fairness. The real question is whether it would be to the patentee's advantage to try to make the sort of arrangement which, as the hon. Gentleman stated, he had thought up on the spur of the moment. I think that on further reflection the hon. Member will see that it is not to the patentee's advantage to make arrangements of that sort.
One must be realistic about this. We have, however, as the hon. Member would reluctantly agree, tried in the Bill to cover as many sources of abuse as possible. Indeed, the hon. Member has challenged some of the action which we have taken to do this. I will certainly consider whether any action should be taken in the case of patents to prevent abuse, but the hon. Member will recognise the great difficulties involved in doing this.

Mr. Winterbottom: I am worried about the position. I understand that most of the agreements covering patents provide for a period of years and that usually there is no opportunity for revision of the agreement during that period. It appears to me, therefore, that if there is an agreement for patent rights on an article on which there is a percentage based upon the selling price or the minimum selling price of the article, making provision within the period covered by the agreement for fluctuations in the recommended minimum price, if r.p.m. allows for cut prices in regard to the specific article there can be no possibility of revision of an agreement except by mutual consent.
It could happen that under these patent agreements somebody will suffer in consequence of the Bill, unless the right hon. Gentleman assures us that in

the event of this question being raised in connection with the gateway that has to be considered by the Restrictive Practices Court, these matters would be taken into consideration in view of existing legal agreements which had been entered into. I should like to know, either from the Secretary of State or from somebody responsible in the Government, whether consideration will be given to this point in view of the fact that agreements usually cover a period of years.

Mr. W. Wells: In view of the explanation which has been given, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. Heath: I beg to move Amendment No. 2, in page 2, line 6, to leave out from first "articles" to "as" in line 7 and to insert:
(including articles made by a patented process)".
I suggest that it would be for the convenience of the House, Mr. Speaker, to discuss at the same time Amendments Nos. 4, 5, 6 and 8, which are grouped together and concern patented articles.

Mr. Speaker: indicated assent.

Mr. Heath: These Amendments are concerned with patented articles, articles to which a registered design is applied and articles which are protected by rights now conferred under the Plant Varieties and Seeds Act, 1964, which was dealt with by the House of Commons after the present Bill was drafted. These are known as plant breeders' rights.
In substance, the Amendments do three things. First, they redefine a patented article for the purposes of the Bill. Secondly, they bring within the scope of Clause 2(2) the articles which are the subject of plant breeders' rights and which have not been dealt with in the subsection for the reasons which I have given. Thirdly, the Amendments deal with a case where a patentee has granted a licence to somebody else to manufacture the patented article and has authorised that licensee to grant sub-licences enabling a third person to manufacture the patented article.
The first objective is dealt with in Amendment No. 2. Patented articles are described thereby as
including articles made by a patented process.


This is the definition accorded to patented articles in the Patents Act, 1949, and I suggest that it is right that we should have the same definition in the Bill. The second objective is dealt with in Amendment No. 8, which introduces subsection (5) to deal with plant breeders' rights. These are conferred by the Act to which I have referred and in horticulture they are broadly identical to the patent rights conferred under the Patents Act. Therefore, as they are in the same case as patents and registered designs, they should clearly be expressed in the same way in this Bill.
The third object of the Amendments is dealt with in the third Amendment, that in line 18. Its effect is to make the proviso to subsection (2) apply to the price fixed in any sub-licence to manufacture patented articles granted by a licensee from the patentee. At the moment, this proviso relates only to the licence granted by the patentee himself. I have been advised by the experts that it is usual for a licensee to be authorised by the patentee to grant sub-licences authorising others to make and supply the patented article. Therefore, the proviso, as amended by the Amendment, will also deal with that case.
The other two Amendments in page 2, lines 13 and 18, are drafting Amendments as part of the whole scheme covered by the five Amendments. The Amendments have the three objectives which I have described—to bring the definition of the patented article in line with the Patents Act, to bring in the plant breeders' rights and to take account of authority given to licensees to grant sub-licences for a third person to manufacture the patented article. I hope that they commend themselves to the House.

Mr. H. Lever: I wish to raise one point, and I hope that I am in order in raising it now. I might have raised it on the discussion which we have just had.
It would seem from what the Secretary of State has said about the effect of the Clause that all these people will operate a somewhat peculiar system concerning existing contracts. If a man has agreed to pay a royalty on the basis of an undertaking by his supplier that he will enforce a minimum price, the Clause would abrogate the

obligation of the patent owner and the customer will still be obliged to pay the royalty. I may agree to pay 2s. in the £ on some of the articles covered by the Amendment on the ground that my supplier has contracted with me that he will enforce a minimum price of £1 for the article. As I understand the Secretary of State, I will not get the benefit of the contract in so far as it obligates the patentee to enforce a minimum price of £1 but will be made liable to pay the 2s. that I have agreed as a royalty.
It seems to me that this is an extraordinary state of affairs. I wonder whether the Clause should be looked at again because it takes away one part of the contract—that part which fixes a retail price. Any obligations which have been entered into become void from the patentee's point of view, but any obligation which the customer has entered into, which may have been directly occasioned by reliance on the price being maintained, will be kept in force. It seems most alarming that one party to the bargain must keep his part of the bargain and may well have been relying on a fixed retail price and the other party, however reluctant he may be, will be relieved of the obligation. Indeed, he will be compelled to renege on the obligation to enforce a fixed price.

Mr. Speaker: Will the hon. Member help me? I do not follow how what he is saying relates to this series of Amendments.

Mr. Lever: I confess that it would appear to me that it would have related more to the previous Amendment, but I had hoped that it would come within the ambit of this Amendment.

Mr. Speaker: I am afraid not. I must abide by the rules. If I do not, the night becomes a little longer than otherwise.

Amendment agreed to.

Further Amendments made: In page 2, line 13, leave out from "patent" to end of line 14.

In line 18, leave out first "registered design" and insert "by a licensee under any such licence".

In line 18, leave out "or registered design".—[Mr. Heath.]

6.45 p.m.

Mr. Paget: I beg to move Amendment No. 7 in page 2, line 20, at the end to insert:
(3) Where a supplier enters into an agreement with a dealer whereby he retains ownership in goods up to the time of delivery or sale to a consumer and his normal practice before the passing of this Act was to supply goods on sale to the dealer for resale the agreement shall be void.
While I have never disguised my dislike of a Bill which condemns wholesale the evolved customs of the distributive trade of this country, equally I have never disguised my view that there may be instances in which a particular practice, such as resale price maintenance, may be abused. One of those instances—indeed the major one, to my mind—concerns expensive articles, such as motor cars, television sets and various items of machinery where maintenance charges are unjustifiably confused with price and where probably a price disadvantageous to the public, on the whole, is maintained without compensating advantages to any wide and established distributive system. It seems to me that, as drafted, the Bill exempts precisely such expensive types of articles.
I agree with my hon. Friend the Member for Manchester, Cheetham (Mr. H. Lever) that, if we are to have this Bill at all, we should seek to make it fair for everybody. But I regard that as a much less powerful argument than the argument that we should not leave open means for the dealers in expensive articles to exempt themselves. They can do that without any difficulty at all, in my view, by agency agreements.
The man dealing in bars of chocolates, breakfast cereal or in any of the small items handled by the small shopkeeper cannot protect himself by an agency agreement.

Mr. H. Lever: Why not?

Mr. Paget: Because it would be far too complicated to work. It is not possible to have an arrangement whereby every small shopkeeper is one's agent to hold bars of chocolate until they are sold across the counter without running all the risks which a principal must take for the actions of his agents. One can escape from that sort of risk only when the agreement deals with a large enough sum to allow for a special

contract which exempts the supplier from the liabilities which he would run at common law for the actions of his agent.
May I take motor cars as an example? If any motor car manufacturer wishes to retain resale price maintenance, all he has to do is to work out an agreement with his agents whereby the property in the car remains in him until it passes to the customer. On the sale to the customer the profit at the maintained price is payable to the dealer as a commission.
That walks straight through this Bill, and it is a very easy arrangement to make. I will come to that a little later, but, as an example, I would deal with the Ford company at this moment.
The Ford company at this moment is busily engaged in taking over the finance of hire purchase of its vehicles. It is now going to become, in so far as it can arrange it, the financier who owns the car which is let on hire purchase by the Ford dealer. In fact it is offering at this very moment interest advantages of between 17 per cent. and 24 per cent. to transfer this business from the finance companies to the Ford company. Now, of course, if that is done, then it would need only the smallest adjustment for the Ford company to remain the proprietor of that car throughout, till the point of sale, and as the proprietor it can say and maintain what the price will be.
There was some correspondence between the right hon. Gentleman and my hon. and learned Friend the Member for Walsall, North (Mr. W. Wells) on this point. The right hon. Gentleman wrote to my hon. and learned Friend as follows:
Your Amendment had in fact already led me to consider the wider point of whether agency is likely to be used as a device for circumventing prohibitions in the Bill. I have reached the conclusion that the risk of this is in practice very small, and that in any event measures to counteract it, such as it is, could not help but work great injustice. I think the risk is small for the reason that to go over to an agency basis suppliers would have to undertake a very substantial reorganisation of their business arrangements. Moreover, they would have to assume responsibility for the conduct and liabilities of their agents which would entail the risk of heavy legal obligations.
Pausing there for a moment, that would certainly be so if they left the


matter at common law. But there is not the slightest difficulty. Any lawyer—the Attorney-General—any lawyer at all would have no difficulty at all in drafting a contract which excluded the common law liabilities. That is done with no difficulty at all. The provisions would be that in this case the principal would not be responsible for the actions of the agent as detailed in the contract. This type of contract which excludes the common law liabilities is drafted hundreds of times for every finance house under hire purchase, and they exclude all the common law liabilities which would normally adhere to the hirer and owner of the goods let to a customer. This is done, and so there is no difficulty at all in drafting a contract which would exclude all the difficulties suggested by the Secretary of State here.
All that really happens is this. The car goes to the agent. The agent pays, in just the same way as he does now. That will depend on the particular arrangements with different agents. He does not pay it as the price for the car. He pays it as a deposit on the car, which remains the property of the supplier. On the sale by the supplier the agent retains his profit as a commission, and there the proceedings close. The contract between both the supplier and the agent, and the supplier and the ultimate customer through the agent, includes the necessary clauses which prevent the supplier from incurring any of the common law obligations which would normally arise in the case of a principal selling through an agent. As a matter of law there is no difficulty in this at all.
It will happen. The Ford arrangements at the moment are a foretaste of its happening. It will happen with the car manufacturers if, as is highly probable, they and their agents wish to maintain price maintenance. It will happen with television sets—again, articles which are quite expensive enough to warrant special contracts. Indeed, when one does buy a television set one nearly always does enter into a special contract which provides a guarantee of maintenance, in exactly the same way, of course, as, when one buys a car, one accepts a compulsory guarantee which in fact excludes the supplier

from all his common law liabilities and liabilities under the Sale of Goods Act. These are the sorts of contracts which can exclude any common law embarrassment or Sale of Goods Act embarrassment to a supplier who supplies to an agent instead of a retailer.
It can apply, also, of course, to the various articles of machinery which are at present price maintained and of considerable value. I think that in practice this would probably not be a very workable system for articles costing—I draw a rough line—under £10 or £15, but for all the range over that kind of price this gate is absolutely wide open.
If this Bill has any justification at all I should have thought it had infinitely more justification in this sphere than it has in the field where distribution takes place through a small retailer who has probably invested his savings in a very small business and whose existence really depends on the maintenance of the prices of the articles in which he deals and on which he lives. He must maintain a larger profit-turnover than the supermarket which can operate on enormously large turnover. Where it is least justifiable, the Bill will probably work, but with more expensive goods the gate is wide open. It is to shut that gate that the Amendment is proposed.

7.0 p.m.

Mr. Maxwell-Hyslop: The Amendment is largely unnecessary, because the class of goods described by the hon. and learned Member for Northampton (Mr. Paget) is largely that class of goods characterised by part exchange dealings, and where there are part-exchange dealings resale price maintenance is largely inoperative anyway.
Secondly, the Amendment is quite valueless—and it is hardly worth discussing it—because if it were embodied in the Bill, anybody who wanted to circumvent it would have between tonight and the date when the Bill received the Royal Assent to sign any agency agreement he liked. If he did so, he would escape the Amendment, because it would then be a normal contract before the passing of the Act. This is, therefore, a totally valueless Amendment.

Mr. Wade: I would not wish to be bound to the actual wording of the Amendment, but it raises an important issue. There may be a substantial loophole, and we have to be realistic and appreciate that efforts will be made to find loopholes in the Bill. We have had that experience with collective price agreements. One of the reasons why so many agreements were withdrawn was because ways of getting round them were found. I do not think that they were withdrawn because it was thought that an application to the Court would fail. However, that is another story. I merely make the point that members of the legal profession will be advising on ways and means of getting round the Bill.
I shall be interested to hear what the Secretary of State has to say, but there may be a loophole in this Clause. The supplier of cars, for example, may appoint an agent solely to maintain prices, and the property would not pass until the actual sale, in which case, presumably, there would be no question of resale price maintenance as defined in the Bill. A garage might be financed by a manufacturer and the garage proprietor might be quite willing to enter into some such arrangement.
I take the point that where there is already exchange dealing the resale price system is largely ineffective because of the margin of difference in the allowance on second-hand cars. However, it would be possible for a supplier to arrange with a garage proprietor as his agent that any second-hand cars bought by the garage proprietor should be bought by him as agent for the supplier. That is not impossible. The Bill would be completely ineffective in that event.

Mr. Paget: It is said that part-exchange has destroyed resale price maintenance in the motor trade. I do not know whether the hon. Gentleman has ever tried to part-exchange a car, asking a number of dealers. In my experience they look it up in a book and the price offered varies almost not at all.

Mr. Wade: I cannot entirely accept that. There is a price list, but the extent to which there are variations is curious. Frankly, I do not have a great deal of time to go round different garages when I sell a used car.
There are customs about the return of unsold newspapers. These customs may have varied over the years. There may be a difference in this respect between newspapers and journals. It is a benefit to a newsagent to be able to return newspapers or journals which he has not sold. What would happen if the supplier made the newsagent his agent for the purpose of selling, so that the property did not pass until sold? Presumably, the Bill would not cover this. The newsagent would merely be an agent selling on behalf of the supplier and would not be a retailer within the meaning of the Bill.
The Amendment, therefore, does raise an important issue. The doubts expressed may be completely set at rest by the right hon. Gentleman, but I am sure that it has been well worth raising this matter.

Mr. Graham Page: I remind the hon. and learned Member for Northampton (Mr. Paget) that this is a Resale Prices Bill and that the Long Title refers to resale prices and that Clause 1 deals with contracts for the sale of goods by a supplier to a dealer. The Amendment attacks direct sale from the owner to the customer. To that extent it goes far beyond the intentions of the Bill, and I am not certain where this principle would end.
It is true that the Amendment is fairly narrow and that all it says is that if a supplier has been selling to dealer X for his resale of the goods, after the passing of the Bill he must not appoint X as his agent. It takes the existing set of facts before the Bill becomes law and says that the supplier must not appoint the dealer, Mr. Smith or Mr. Brown or whoever he may be, with whom he has been dealing, as his agent. The supplier can appoint someone else as his agent. I would have thought that it was scarcely fair between one trader and another that a man who happens to have been dealing in the ordinary way of resale with a retailer before the Bill became law should not be able to appoint that man to act as his agent but able to appoint anyone else he chooses. In that way the principle behind the Amendment would be completely defeated.
I do not like the principle anyway. It is the thin end of the wedge of


attacking agency sales altogether. I hope that my right hon. Friend will resist it, because it goes far beyond the intentions of the Bill. The end of the principle of the Amendment is that a supplier would not be able to appoint an agent to sell goods for him. He would not be able to appoint a salesman. The ownership in the goods does not pass when he appoints a salesman or agent and the supplier would therefore be caught by the principle of the Amendment, if not by the narrow Amendment as it stands.

Mr. Jay: I appreciate the difficulty, but does not the argument of the hon. Member for Crosby (Mr. Graham Page) in substance mean an admission of the main argument of my hon. and learned Friend the Member for Northampton (Mr. Paget)—that it is possible to get round the Bill by direct sales?

Mr. Page: I do not think that it will get round the Bill when it is a direct sale. The purpose of the Bill is to make resale price maintenance agreements void. It is not to attack what a man chooses to do about selling his own goods.

Mr. Jay: Is it not the purpose of the Bill, in the opinion of most people, to make it impossible for manufacturers to dictate retail prices, and do not the circumstances outlined by my hon. and learned Friend get round that?

Mr. Page: The Amendment says that the manufacturer who still keeps ownership of his goods cannot enter into certain agency agreements, that they are void. It happens to deal only with agency agreements between the manufacturer, or supplier, on the one hand and, on the other hand, the retailer with whom he had been dealing previously. That is the thin end of the wedge of an attack on the whole system of agencies, and I hope that my right hon. Friend will resist it.

Mr. H. Lever: It would be useful to clear up the technical points involved. What the hon. Member for Crosby (Mr. Graham Page) said is right, but this is to argue the form and not the substance of the Amendment.
My hon. and learned Friend the Member for Northampton (Mr. Paget) has no desire to put teeth into a Bill which

already bites many honest citizens and traders viciously enough without any further intervention by those who hold the view held by my hon. and learned Friend and myself. The purpose of the Amendment is to open for discussion the inadequacy of the Bill by making it plain in the simplest manner imaginable that anyone who wishes to frustrate the declared intentions of the Government and the purposes of the Bill can do so by setting up an agency agreement where hitherto there has been the normal process of sale by a retailer. He continues the existing reality, if he chooses to do it behind a legal smokescreen; instead of saying to the retailer, "I will sell you an article for £2 which you must not sell for less than £3", he makes the retailer his agent to sell the article at an agreed price of £3. The latter is obliged to sell it at that price on pain of action for damages, which would not be prevented by the Bill. If the manufacturer dictates to the retailer that he must sell it at £3, then he must sell it at that price, because it is not his property but the manufacturer's.

Mr. Cole: The hon. Member meant "to the agent", not to the retailer.

Mr. Lever: The retailer before the Act becomes the agent after the Act.
Where I disagree with my hon. and learned Friend is in imagining that there is any difficulty in applying this evasion of the Bill to smaller articles than television sets. It would be the easiest thing in the world to cover 1d. packets of pins just as effectively, because a little ingenuity and legal drafting will produce the reality of the original manufacturer-retailer situation but the legal form of an owner-agent situation. Nothing is changed in reality; only the legal relationship is changed. Instead of the device of selling to another man who, in turn, sells to the public, there is a device to sell direct to the public by means of an agent.
I have no desire to widen still further the mischief of this mischievous Bill, nor has my hon. and learned Friend. The purpose of the Amendment is to expose to the consideration of the House the totally inadequate way in which the Bill has been drafted and the mischief of this hastily conceived legislation. Per-


haps it is not hastily conceived. Somebody likened the Bill to a mosaic, but I would rather liken it to a sleeping foetus with an elephantine period of gestation in the Board of Trade pigeon hole until the Minister, seeing a General Election upon us, induced a premature birth, with some of the horrible consequences of such a birth.
We have a situation in which the more righteous manufacturer, the more upright man, who is disinclined to seek protection for his trade practices through legal quibbles and evasions, may not make use of this way out, but the more ruthless and unscrupulous manufacturer will not have the slightest difficulty in riding his way through the Bill.
It is not difficult to think of innumerable other ways of evading the Bill if one is minded to do so, but I will concentrate solely on this way and on the arguments advanced. The Government are told, "You intend to prevent manufacturers from enforcing a minimum price. Here is an obvious loophole whereby manufacturers can enforce a minimum price". It is not then adequate for the Minister to send back a letter saying, "I do not think that many people will make use of this device because it may have many inconveniences". Those inconveniences referred to in the letter were adequately dealt with by my hon. and learned Friend, and what he said was sound and unchallengeable law. None of these inconveniences cannot be dealt with by suitable contract. Many people have such agency agreements and have already protected themselves, and we need not engage in the striking novelty of legal invention. One has only to adopt the wording of contracts already in existence in the areas of trade where sale by agency is the normal course of trade.
7.15 p.m.
I want to make it abundantly clear that nobody should imagine that I want the Bill extended to cover sales by agency or by a manufacturer of his own product. But it is worth highlighting in this manner the frivolous way in which the Bill has been drafted. It has been claimed that where we are dealing with such articles as motor cars and television

sets, where the common practice is to have part-exchange, resale price maintenance has gone by the board anyway. I will not go into detail, because it would weary the House, and it can be dealt with in a sentence or two. If resale price maintenance has gone by the board in the motor and television industries, what are we legislating for? These are the prime evils with which we have been tormented throughout the passage of this ill-begotten, inadequately throughout and badly drafted Bill.
It is an extraordinary defence of the Bill now to say that in the main areas where the Bill is supposed to improve the situation, there is no need for improvement because the practice of part-exchange has already done the job for the Government. I understand why the Government rely on the blind forces, because they see a little more clearly than do some of the Ministers when they are trying to enact legislation. But this argument is untrue. If it were true, we should not need the Bill. In the motor trade, the classic area of part-exchange, resale price maintenance is effective. There are means of enforcing it even though part-exchange takes place. I do not want to turn the House into a discussion group of the Motor Traders' Association or to throw out speculative possibilities of how motor traders could enforce a resale price system against part-exchange. The answer is short: they were doing it for many years before the Bill was introduced. My hon. and learned Friend showed means whereby they can continue to do it after the Bill is enacted.
The Secretary of State simply says, "Well, if anybody is mean enough to use this device to get round the Bill…". When I mentioned one other of the innumerable devices for getting round the Bill, he adopted a contemptuous attitude, with such a remark as, "These are the sort of mean-minded chaps who will get round my drafting and frustrate my purposes". If he will interfere with people's legal trading rights, they are liable to exercise any legal ingenuity they may to avoid his legislation. He should be clear about that.
This is not a moral issue. The right hon. Gentleman may have convinced himself that every decent citizen regards


with horror the idea of continuing a practice which has been respected for centuries by respectable trades, but he has not convinced the public. This may arouse horror in his breast, but there is no morality behind his legislation, which does not command the moral assent of the population so that they would be ashamed to find legal devices to circumvent his legislation. There is no moral passion on this issue. On balance, the moral forces in the country hold this legislation in contempt and think that it is aimed at a most honourable practice of trade in this country. Even so near to the General Election, I must pay tribute to many hon. Members opposite, because it is easy for my hon. Friends and myself to ridicule the Bill but it is not so easy for hon. Members opposite to do so.

Mr. Speaker: Order. The hon. Member must apply himself to the Amendment. We have already had a passage of his speech on obstetrics.

Mr. Lever: I wish to compliment hon. Members opposite on their integrity and courage in fighting for what they believe to be a moral cause. It is relevant to point out that if resale price maintenance were recognised more or less universally to be a wrong and criminal thing to do, the Secretary of State would be entitled to say, "There will always be shady firms who will seek to flout the general moral sense of the community in which they live". But that is not the case here. There is no general conviction that resale price maintenance in itself is an evil thing. I was supporting my contention that the nation is at least divided on whether it is right or wrong to enforce resale price maintenance by indicating the courageous struggle which many hon. Members opposite have conducted against the Bill in the course of our debates. I therefore respectfully submit that the case made out by my hon. and learned Friend cannot be answered.
I will try to close with a sentence or two, but it is directly relevant to this case. Everybody will agree that a genuine agency agreement not intended to circumvent the Bill should be and will be unaffected by the Bill, but that means that those manufacturers who are trading by agency agreements—leaving aside the question of evasion raised by my hon. and learned Friend—will be entitled to fix

their retail prices as before because the goods will be theirs. This proves the illogicality of the Bill. If the fixing of a retail price is such a harmful thing for the community, whatever means produces that result should be opposed. Why, therefore, should we allow ordinary agency agreements to continue in force?
It is all very well to say that these are not intended to be covered by the Bill. That is the weakness of the Government's case. If it is evil to enforce a retail price, it must be evil whether it is done through a strange retailer or through a retailer who is a stranger but is one's agent. If it is evil to do it by way of deliberate circumvention of the Act, why is it virtuous to do it because one traditionally has traded by way of an agent? I cannot see the distinction. I am sorry to elaborate this but we are owed an answer. If A is a manufacturer and supplies a retailer and always has supplied him by way of an agency agreement, he is outside the Act; and if A is a manufacturer who used to sell to a retailer who in turn sold to the public, and he changes it to an agency agreement, he is still outside the Act; and yet in one case the Secretary of State thinks that it is a terrible thing and a mischievous evasion of the Bill, and in the other case he thinks that it is a normal trade practice. Why?
Is resale price maintenance an evil thing? If it is, then whatever mechanisms exist to bring it about should be abolished; and the reason that I stress the point is that once we accept that proposition we realise the impossibility of enforcing the Government's intentions, because nobody would consent to legislation which would have the effect which my hon. and learned Friend pointed out, because it would have the effect of preventing a man from selling his own goods.

Mr. Maxwell-Hyslop: Those must be two of the longest sentences that HANSARD will ever have printed.

Mr. Lever: I am sorry if my enthusiasm provoked the hon. Member to an exhibition of wit. I must do my duty as my thoughts come to me. I am not seeking to delay the House but to address my mind honestly to the points which the House has to consider.

Mr. Graham Page: Does not the logic of the hon. Member's argument and of the Amendment mean that if one appointed a traveller to sell one's goods, he could sell them at any price he chose and it would be illegal for the supplier to make an agreement with the traveller to sell goods at a certain price? Does the hon. Member mean that we should legislate against that?

Mr. Lever: The logic is that if we seek to abolish resale price maintenance and to do it comprehensively, we get ourselves into an utterly ridiculous and impossible situation, such as an attempt to abolish it in respect of a traveller. My conclusion is not to strength the legislation and to make it comprehensive and all-embracing but to sling it back into the dusty pigeon hole from which it was ruthlessly taken by a misguided Secretary of State, and mistakenly approved by a Prime Minister who, whatever virtues of integrity and charm he may possess, knows very little, except on the surface, of our economic and domestic problems; and it is too high a price to pay for having that Prime Minister to have this kind of misbegotten legislation.

Mr. Cole: I intervene briefly only because of some remarks made by the hon. and learned Member for Northampton (Mr. Paget) and the hon. Member for Manchester, Cheetham (Mr. H. Lever). The hon. Member for Cheetham does not want a Resale Prices Bill but a prices Bill. After listening to the hon. and learned Member for Northampton, I was not certain whether he would be in demand by those who want to find ways of avoiding the Bill or whether he would be avoided for having attempted to introduce the Amendment to stop them. First of all, he finds a very good way round the Bill and then he proceeds to make it void if that way is adopted.
7.30 p.m.
I do not know where the hon. and learned Gentleman stands on this matter. This is all rather nonsense. Where are we going to stop? What about the firms who advertise in journals and who make the goods which they are selling? What about the people who build their own houses and who advertise? We are not trying to stop everything. We are

not trying to stop the practice of industrial development. We are merely trying to stop those practices which are not in the public interest. We are merely trying to prevent the public from paying more than they need to pay because the manufacturer or supplier is insisting on a minimum retail price.
This Bill is for the benefit of the public as a whole. It is for the benefit of the supplier, the dealer and the consumer, and what a difficult job it is to ensure that it is of benefit to all concerned. I am convinced that we shall need amending legislation in less than five years from now. That is no reflection on my right hon. Friend's efficiency. It is a reflection on our desire always to try to bring in the most up-to-date legislation for the benefit of the public. In many cases the provisions in the Bill will, in the light of experience, prove more than adequate, or not adequate enough, or not comprehensive enough. If we said anything else, we should be stupid, because amending legislation is a habit of this House, and may it ever continue.
I do not believe that half the things presaged by the hon. and learned Member for Northampton will happen. He mentioned motor cars and television sets. There is nothing in the Amendment which says that the article in question must be an expensive one. As the hon. Member for Cheetham said, we may be dealing with a penny packet of pins.
Earlier in the debate the hon. and learned Member for Northampton said that many people had been diverted from using their industrial energy because they were concerned about the time available for putting cases before the Court, the implication being that they ought to spend their time pushing their business. But that is what manufacturers are doing. They are not fiddling around with agencies and things like that. The firms which I know will get on with the job of making their goods and selling them.

Mr. Paget: I assure the hon. Gentleman that the legal problems and difficulties of taking avoiding action against the provisions of the Bill are so much simpler than the problems involved in applying for exemption to the Court and


presenting a case there. One is a problem, whereas the other can be passed to a local solicitor and he will send back the appropriate document.

Mr. Cole: I did not say that there was a relationship between the amounts of work involved. I agree with what the hon. and learned Gentleman said earlier, that the job of directors of companies was to push their businesses. I do not think that they will be deflected from doing it by trying to find ways round the Bill, because in many cases that will not produce anything like an adequate reward for the time and trouble involved.
I am not sure that many firms in this country will necessarily apply for exemption, because, if they do, such will be the congestion of the Court that a lot of the Bill will be invalidated because of the length of time taken to get the cases through the Court. I am certain that many firms will not indulge in that practice but will, instead, go out into the market and sell their goods.
In one or two trades competition is such that the people in them may well accept an agent or a distributor to sell their goods at the best possible price. It is unfortunate that the hon. and learned Member for Northampton chose the motor car trade which, above all, is exemplified by the number of service-after-sale agreements it gives for 12 months. It is unfortunate that the hon. and learned Gentleman chose that example to illustrate his Amendment.
We have heard about how people will get round the provisions of the Bill. There will always be clever people who will always get round any Measure. The hon. Member for Cheetham does not want this pushed too far, because if it is he will lose half his business in future. I do not think that we need worry about this too much. We can all think of half a dozen things of this nature which would tend to compromise the Bill.

Mr. Jay: The hon. Gentleman says that there are ways around the Bill, but he says that we need not worry about them. Is it that he does not want to stop up loopholes in the Bill?

Mr. Cole: I want a certain number of them to be stopped by the Bill, and I want a certain amount of resale price maintenance to go on. I have said that

from the beginning. That is why I consider that the Bill has a certain job of work to do, and that is why some of us have done our best to ensure that it does that job of work. I did not say that we should not take notice of these loopholes. I said that this was not different from a number of other devices which one could consider. But if someone wants that, he does not want a Resale Prices Bill but a Prices Bill. It will be very much larger than this one, and it will cover everything under the sun. It will cover people who manufacture things which one buys on the spot.
The hon. Member for Cheetham said that his hon. and learned Friend the Member for Northampton was trying, not to put teeth into the Bill but to do something which he described in some other elegant phrase, but I think that the mischief is there. The hon. and learned Member for Northampton is trying to do just that. He is trying to open it up, and possibly to baulk the purpose of the Bill by drawing attention to various ways around it and by suggesting methods by which it can be circumvented. I am content to make the Bill deal with resale price maintenance, and to make it as efficient and direct as possible. I am prepared to do one thing at a time and to see how it works out. I realise that there are clever lawyers who will get round these things, but I think that the end result will be a good one.

Mr. Heath: We discussed this matter in Committee, and, as the hon. and learned Member for Northampton (Mr. Paget) said, there has been correspondence between myself, the right hon. Member for Battersea, North (Mr. Jay), and the hon. and learned Member for Walsall, North (Mr. W. Wells) about this matter. I am not certain what is the position of the hon. and learned Member for Walsall, North. I understood that he wished to stop up a loophole. It is obvious that the hon. and learned Member for Northampton wishes to do the opposite, and he is strongly supported by the hon. Member for Manchester, Cheetham (Mr. H. Lever), who alone has introduced crime and immorality and various other phrases which have no connection with the matters which we are discussing.
When we were discussing these matters, I understood that the objective


was to plug a loophole in the sale or return system. I hope that by my earlier remarks, and in the correspondence which we have had, I have convinced the hon. and learned Member for Northampton that the sale and return system is not a way of evasion as far as the Bill is concerned. This, therefore, is not one of the devices about which the hon. Member for Cheetham will be able to advise his clients.
There has now come into the discussion the whole question of agency arrangements. Our view is that agency arrangements exist at the moment. They are justifiable and genuine arrangements, and there may be a need for such arrangements in the future. The Amendment would prevent them coming into effect, and therefore I could not accept it, nor could I recommend the House to accept it, because I believe that the opportunities for agency arrangements should remain.
There is a difference of judgment as to whether these are going to be used as a means of evading the Act. The hon. and learned Member for Northampton thinks that this will be done easily by a local solicitor. I am advised that it will be very difficult to draw up arrangements which do not destroy the real concept of principal and agent. It may be that the hon. and learned Member for Northampton will be able to do this, but I am convinced that it will be difficult, and that it will have to be done with great care.
As my hon. Friend the Member for Crosby (Mr. Graham Page) has pointed out, the Amendment is defective. What it does not do is to find a means of distinguishing between the genuine agency agreement and the agency agreement which is being used in the form of evasion. I therefore do not believe that I could commend the Amendment to the House. We believe that opportunities for making genuine agency arrangements should remain, and we therefore consider that in this respect the Bill should remain as it is.
On the other hand, I do not believe that it will be used very much as an evasion. If it is, no doubt action can be considered later on. It is not likely that this method will be adopted in a

large part of the field in which resale price maintenance is at present used. I say that the Amendment itself is defective, for the reasons that I have given, but I am not basing my answer on those points. I say that an opportunity should be left open for agency agreements to be made where appropriate. I hope that the House will not accept the Amendment.

Mr. W. Wells: As I understand it, the dispute between the two sides on this argument is a comparatively narrow one. Probably everything that the right hon. Gentleman has said in relation to sale and return is right. I also agree that there is a sphere in which agency arrangements are appropriate, justifiable and legitimate. We would in no way seek to restrict them, although in the course of the debate I have felt from time to time that one of the defects of the Amendment is that it does not go far enough.
The right hon. Gentleman says that one of its defects is that it does not distinguish between the genuine agency arrangements and the agency arrangement which is entered into for the purpose of evading the Bill's provisions. Whatever may be the defects in the drafting of the Amendments, it is quite clear that the object at which we are aiming is simply the prevention of evasion. We are saying that where, up to the passing of the Bill, a supplier has been supplying goods to a retailer by way of sale but then, in order to avoid the provisions of the Bill, he alters the basis of his dealing so that the retailer becomes a mere agent, then, and only then, will the Amendment come into play. I accept the somewhat patronising intervention of the hon. Member for Tiverton (Mr. Maxwell-Hyslop), as a matter of words, but when he has been here a little longer he will know that it is quite simple to rectify matters of this kind at a later stage.
I commend the point made by my hon. and learned Friend the Member for Northampton (Mr. Paget) that, in effect, a large-scale operator may well find it worth while to frame arrangements that avoid the usual common law responsibility of the principal for his agent by the terms of his contract. The Secretary of State says that it is difficult to frame the terms of a contract of this kind, but


my hon. and learned Friend thinks that a large-scale operator may look for ways of avoiding some of the provisions of the Bill and will be able to pay a skilful lawyer to draft his contracts for him. I have no doubt, however, that a loophole exists in these agency arrangements, and that is what we are seeking to deal with.
7.45 p.m.
Some of the speeches of hon. Members opposite have led me to the reluctant conclusion that the last thing they are anxious to do is to close these loopholes. That conclusion was forced upon me by the speech of the hon. Member for Bedfordshire, South (Mr. Cole) and also, in a different form, the speech of the hon. Member for Crosby (Mr. Graham Page). Being the son of a mathematician, I will not use his precise words in repeating that the point of the Amendment is a narrow one, because I was educated to think that a point was something which had no area. It is true that the Amendment seeks to achieve a limited purpose. It is a purpose to which we drew the Secretary of State's attention in Committee.
If he formed the conclusion that the Amendment was directed only to the question of sale and return, I can only say that I cannot understand how he came to that conclusion. The correspondence that has taken place between the right hon. Gentleman, my right hon. Friend the Member for Battersea, North

(Mr. Jay) and myself—a somewhat triangular correspondence—has covered many of the points in issue. I agree entirely with my hon. and learned Friend for Northampton that the arrangements which the right hon. Gentleman says are very difficult to frame are really not very difficult.

I believe that there is a danger of a large-scale evasion of the purposes of the Bill. We have laboured in vain to draw the right hon. Gentleman's attention to this fact, and to point out the gravity of the matter. That our efforts have been in vain may be our own fault. The fact remains that on several occasions we have tried to bring our point of view to his attention. He has not responded. He has taken up with us points which we do not believe to be the real points at issue. Although he has done this with his usual courtesy and still, we feel that this is a matter of principle and that if he is serious in pursuing the purposes of the Bill he will at some stage introduce an Amendment which will seek to close this loophole.

This is the last opportunity we shall have of dealing with it, and I therefore hope that my right hon. and hon. Friends will press the Amendment to a Division.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 146, Noes 209.

Division No. 91.]
AYES
[7.50 p.m.


Ainsley, William
Diamond, John
Howell, Charles A. (Perry Barr)


Albu, Austen
Dodds, Norman
Howell, Denis (Small Heath)


Allen, Scholefield (Crewe)
Duffy, A. E. P. (Colne Valley)
Howie, W.


Awbery, Stan (Bristol, Central)
Edwards, Rt. Hon. Ness (Caerphilly)
Hoy, James H.


Barnett, Guy
Edwards, Walter (Stepney)
Hughes, Cledwyn (Anglesey)


Beaney, Alan
Fernyhough, E.
Hughes, Hector (Aberdeen, N.)


Blackburn, F.
Finch, Harold
Hunter, A. E.


Blyton, William
Fitch, Alan
Hynd, H. (Accrington)


Bowden, Rt. Hn. H. W. (Lelcs, S.W.)
Fletcher, Eric
Hynd, John (Attercliffe)


Bowles, Frank
Foley, Maurice
Irvine, A. J. (Edge Hill)


Boyden, James
Foot, Michael (Ebbw Vale)
Irving, Sydney (Dartford)


Braddock, Mrs. E. M.
Fraser, Thomas (Hamilton)
Janner, Sir Barnett


Bradley, Tom
Galpern, Sir Myer
Jay, Rt. Hon. Douglas


Broughton, Dr. A. D. D.
George, Lady Megan LloYd (Crmrthn)
Johnson, Carol (Lewisham, S.)


Butler, Herbert (Hackney, C.)
Ginsburg, David
Jones, Elwyn (West Ham, S.)


Carmichael, Neil
Gordon Walker, Rt. Hon. P. C.
Jones, J. Idwal (Wrexham)


Chapman, Donald
Gourlay, Harry
Kelley, Richard


Collick, Percy
Grey, Charles
Kenyon, Clifford


Craddock, George (Bradford, S.)
Griffiths, David (Rother Valley)
Lawson, George


Crossman, R. H. S.
Gunter, Ray
Lee, Frederick (Newton)


Cullen, Mrs. Alice
Hale, Leslie (Oldham, W.)
Lee, Miss Jennie (Cannock)


Dalyell, Tam
Hamilton, William (West Fife)
Lipton, Marcus


Darling, George
Hannan, William
McBride, N.


Davies, G. Elfed (Rhondda, E.)
Harper, Joseph
McCann, J.


Delargy, Hugh[...]
Hayman, F. H.
MacDermot, Niall


Dempsey, James
Holman, Percy
McInnes, James




McLeavy, Frank
Pursey, Comdr. Harry
Symonds, J. B.


Mallalieu, J.P.W. (Huddersfield, E.)
Rankin, John
Taylor, Bernard (Mansfield)


Mapp, Charles
Rees, Merlyn (Leeds, S.)
Thomas, Iorwerth (Rhondda, W.)


Mason, Roy
Rhodes, H.
Thompson, Dr. Alan (Dunfermline)


Mayhew, Christopher
Roberts, Albert (Normanton)
Thomson, G. M. (Dundee, E.)


Mellish, R. J.
Robertson, John (Paisley)
Tomney, Frank


Mendelson, J. J.
Rodgers, W. T. (Stockton)
Wainwright, Edwin


Mitchison, G. R.
Short, Edward
Weitzman, David


Monslow, Walter
Silkin, John
Wells, William (Walsall, N.)


Moody, A. S.
Silverman, Julius (Aston)
White, Mrs. Eirene


Neal, Harold
Skeffington, Arthur
Wilkins, W. A.


Noel-Baker, Francis (Swindon)
Slater, Mrs. Harriet (Stoke, N.)
Willey, Frederick


Noel-Baker, Rt. Hn. Philip (Derby, S.)
Slater, Joseph (Sedgefield)
Williams, W. T. (Warrington)


Oram, A. E.
Small, William
Willis, E. G. (Edinburgh, E.)


Padley, W. E.
Smith, Ellis (Stoke, S.)
Wilson, Rt. Hon. Harold (Huyton)


Paget, R. T.
Sorensen, R. W.
Winterbottom, R. E.


Pargiter, G. A.
Spriggs, Leslie
Woodburn, Rt. Hon. A.


Pavitt, Laurence
Steele, Thomas
Woof, Robert


Pearson, Arthur (Pontypridd)
Stewart, Michael (Fulham)
Wyatt, Woodrow


Peart, Frederick
Stonehouse, John
Yates, Victor (Ladywood)


Pentland, Norman
Stones, William



Popplewell, Ernest
Stross, Sir Barnett (Stoke-on-Trent, C.)
TELLERS FOR THE AYES:


Price, J. T. (Westhoughton)
Swain, Thomas
Mr. Redhead and Mr. Ifor Davies.


Probert, Arthur
Swingler, Stephen





NOES


Anderson, D. C.
Fletcher-Cooke, Charles
Longbottom, Charles


Atkins, Humphrey
Forrest, George
Longden, Gilbert


Awdry, Daniel (Chippenham)
Gardner, Edward
Loveys, Walter H.


Barlow, Sir John
Gibson-Watt, David
Lubbock, Eric


Barter, John
Gilmour, Ian (Norfolk, Central)
Lucas, Sir Jocelyn


Batsford, Brian
Gilmour, Sir John (East Fife)
Lucas-Tooth, Sir Hugh


Bennett, Dr. Reginald (Gos &amp; Fhm)
Glover, Sir Douglas
McAdden, Sir Stephen


Biffen, John
Glyn, Dr. Alan (Clapham)
McLaren, Martin


Bingham, R. M.
Glyn, Sir Richard (Dorset, N.)
Maclay, Rt. Hon. John


Bishop, Sir Patrick
Gower, Raymond
McMaster, Stanley R.


Black, Sir Cyril
Grant-Ferris, R.
Maitland, Sir John


Bossom, Hon. Clive
Green, Alan
Marshall, Sir Douglas


Bourne-Arton, A.
Grosvenor, Lord Robert
Marten, Neill


Box, Donald
Gurden, Harold
Mathew, Robert (Honiton)


Boyd-Carpenter, Rt. Hon.John
Hamilton, Michael (Wellingborough)
Matthews, Gordon (Meriden)


Braine, Bernard
Harris, Frederic (Croydon, N.W.)
Maude, Angus (Stratford-on-Avon)


Brewis, John
Harris, Reader (Heston)
Mawby, Ray


Brown, Alan (Tottenham)
Harrison, Col. Sir Harwood (Eye)
Maxwell-Hyslop, R. J.


Browne, Percy (Torrington)
Harvey, John (Walthamstow, E.)
Maydon, Lt.-Cmdr. S. L. C.


Bryan, Paul
Harvie Anderson, Miss
Mills, Stratton


Buck, Antony
Hastings, Stephen
Miscampbell, Norman


Bullard, Denys
Hay, John
More, Jasper (Ludlow)


Bullus, Wing Commander Eric
Heath, Rt. Hon. Edward
Morgan, William


Campbell, Gordon
Henderson, John (Cathcart)
Mott-Radcliffe, Sir Charles


Carr, Compton (Barons Court)
Hendry, Forbes
Neave, Airey


Carr, Rt. Hon. Robert (Mitcham)
Hiley, Joseph
Nicholls, Sir Harmar


Channon, H. P. G.
Hill, Mrs. Eveline (Wythenshawe)
Noble, Rt. Hon. Michael


Chataway, Christopher
Hill, J. E. B. (S. Norfolk)
Nugent, Rt. Hon. Sir Richard


Clarke, Henry (Antrim, N.)
Hobson, Rt. Hon. Sir John
Oakshott, Sir Hendrie


Clark, William (Nottingham, S.)
Holland, Philip
Orr, Capt. L. P. S.


Cleaver, Leonard
Holt, Arthur
Osborne, Sir Cyril (Louth)


Cole, Norman
Hornsby-Smith, Rt. Hon. Dame P.
Page, John (Harrow, West)


Cooke, Robert
Howard, John (Southampton, Test)
Page, Graham (Crosby)


Cooper, A. E.
Hughes-Hallett, Vice-Admiral John
Pannell, Norman (Kirkdale)


Cordeaux, Lt.-Col. J. K.
Hughes-Young, Michael
Partridge, E.


Corfield, F. V.
Hulbert, Sir Norman
Pearson, Frank (Clitheroe)


Costain, A. P.
Hurd, Sir Anthony
Peel, John


Coulson, Michael
Hutchison, Michael Clark
Pickthorn, Sir Kenneth


Craddock, Sir Beresford (Spelthorne)
Jenkins, Robert (Dulwich)
Pitt, Dame Edith


Crawley, Aidan
Johnson, Eric (Blackley)
Pounder, Rafton


Cunningham, Sir Knox
Jones, Arthur (Northants, S.)
Price, H. A. (Lewisham, W.)


Curran, Charles
Kerans, Cdr. J. S.
Prior, J. M. L.


Currie, G. B. H.
Kerr, Sir Hamilton
Prior-Palmer, Brig. Sir Otho


Dalkeith, Earl of
Kershaw, Anthony
Proudfoot, Wilfred


Dance, James
Kimball, Marcus
Pym, Francis


Digby, Simon Wingfield
Kirk, Peter
Quennell, Miss J. M.


Donaldson, Cmdr. C. E. M.
Kitson, Timothy
Ramsden, Rt. Hon. James


Doughty, Charles
Lambton, Viscount
Rawlinson, Rt. Hon. Sir Peter


Douglas-Home, Rt. Hon. Sir Alec
Langford-Holt, Sir John
Redmayne, Rt. Hon. Martin


du Cann, Edward
Leavey, J. A.
Rees, Hugh (Swansea, W.)


Eden, Sir John
Lewis, Kenneth (Rutland)
Renton, Rt. Hon. David


Elliot, Capt. Walter (Carshalton)
Lilley, F. J. P.
Ridley, Hon. Nicholas


Elliott, R. W. (Newc'tle-upon-Tyne, N.)
Lindsay, Sir Martin
Ridsdale, Julian


Emery, Peter
Linstead, Sir Hugh
Robson Brown, Sir William


Errington, Sir Eric
Litchfield, Capt. John
Roots, William


Fell, Anthony
Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield)
Ropner, Col. Sir Leonard


Finlay, Graeme
Lloyd, Rt. Hon. Selwyn (Wirral)
Scott-Hopkins, James




Seymour, Leslie







Sharples, Richard
Thomas, Sir Leslie (Canterbury)
Whitelaw, William


Shaw, M.
Thompson, Sir Richard (Croydon, S.)
Williams, Dudley (Exeter)


Smith, Dudley (Br'ntf'd &amp; Chiswick)
Tiley, Arthur (Bradford, W.)
Williams, Paul (Sunderland, S.)


Spearman, Sir Alexander
Tilney, John (Wavertree)
Wills, Sir Gerald (Bridgwater)


Stainton, Keith
Touche, Rt. Hon. Sir Gordon
Wilson, Geoffrey (Truro)


Stanley, Hon. Richard
Turner, Colin
Wolrige-Gordon, Patrick


Stoddart-Scott, Col. Sir Malcolm
van Straubenzee, W. R.
Woodhouse, C. M.


Storey, Sir Samuel
Vane, W. M. F.
Woodnutt, Mark


Studholme, Sir Henry
Vaughan-Morgan, Rt. Hon. Sir John
Worsley, Marcus


Summers, Sir Spencer
Wade, Donald



Tapsell, Peter
Walder, David
TELLERS FOR THE NOES:


Taylor, Edwin (Bolton, E.)
Walker-Smith, Rt. Hon. Sir Derek
Mr. Chichester-Clark and


Taylor, Frank (M'ch'st'r, Moss Side)
Ward, Dame Irene
Mr. MacArthur.


Temple, John M.
Webster, David

Amendment made: In page 2, line 29, at end insert:
(5) References in subsection (2) of this section to patented articles shall include references to articles protected by the registration of a design and articles protected by plant breeders' rights or a protective direction under Schedule 1 to the Plant Varieties and Seeds Act 1964, and references in that subsection to a patent shall be construed accordingly.—(Mr. Heath.)

Clause 2.—(PROHIBITION OF OTHER MEASURES FOR MAINTAINING RESALE PRICES.)

Mr. W. Wells: I beg to move Amendment No. 9, in page 3, line 9, at the beginning to insert:
Where it is established that a dealer has acted as described in paragraph (a) of subsection (1) of this section or is likely to act as described in paragraph (b) of that subsection".

Mr. Deputy-Speaker (Sir Robert Grimston): I think that it would be convenient with this Amendment to discuss Amendment No. 10, in page 3, line 10, to leave out "a" and insert "the".

Mr. Wells: Amendment No. 10 is a drafting Amendment, following from the Amendment that I have moved.
We seek to draw attention by means of the Amendment to the danger of any withholding of supplies being held to be unlawful, that is to say under the provisions in Clause 2, simply because of business practices which may have no connection with resale price maintenance. It is therefore important as a matter of procedure to make clear that the requirements of paragraphs (a) and (b) in subsection (1) are proved affirmatively. It is necessary to look in a little detail at the wording of subsections (1) and (3) in order to see what it is that we are seeking to achieve by this Amendment.
Subsection (1) deals with the prohibition of measures for maintaining resale

prices and lays down that subject to the provisions of the Bill with regard to registration and the powers of the Restrictive Practices Court:
…it shall be unlawful for any supplier to withhold supplies of any goods from a dealer seeking to obtain them for resale in the United Kingdom on the ground that the dealer—

(a) has sold in the United Kingdom at a price below the resale price goods obtained, either directly or indirectly, from that supplier, or has supplied such goods, either directly or indirectly, to a third party who had done so; or
(b) is likely, if the goods are supplied to him, to sell them at a price below that price, or supply them, either directly or indirectly, to a third party who would be likely to do so."


Subsection (3) starts with these words which we seek to eliminate:
For the purposes of this Act a supplier of goods shall be treated as withholding supplies of goods from a dealer—

(a) if he refuses to supply those goods to the dealer except at prices, or on terms or conditions as to credit, discount or other matters, which are significantly less favourable than those available to other dealers carrying on business in similar circumstances; or
(b) if, although he contracts to supply the goods to the dealer, he treats him in a manner significantly less favourable than other such dealers in respect of times or methods of delivery or other matters arising in the execution of the contract.


The danger as we see it, and it is a matter of drafting—is in those initial words, the essential words:
For the purposes of this Act a supplier of goods shall be treated as withholding supplies of goods from a dealer…
If he does either of the things specified in paragraphs (a) or (b) of the subsection, that would be sufficient without further ado to bring him within the mischief of subsection (1). We think it desirable—and we seek to do so by this Amendment—to make it perfectly clear for the purposes of subsection (3) that the


mischief arises only where in the words of our Amendment:
…it is established that a dealer has acted as described in paragraph (a) of subsection (1) of this section or is likely to act as described in paragraph (b) of that subsection…
The nub of the Amendment lies in the words
For the purposes of this Act…
This takes us not only outside the scope of the subsection, but right outside the scope of the Clause. We see danger in casting the net as wide as that. Anxious as we are to avoid loopholes—which was the purpose of our last Amendment—we are equally anxious to avoid injustices. It is with the intention of preventing what may be injustices that we have put down this Amendment.

The Minister of State, Board of Trade (Mr. Edward du Cann): I am sure that hon. Members are obliged to the hon. and learned Member for Walsall, North (Mr. W. Wells) for two reasons; first, for the fact that he has raised this matter at all—I entirely agree that it is our object and must be our purpose to prevent injustice—and secondly, for the customary clarity with which he has made his point. I am delighted to have the opportunity of discussing this matter for a short time. We are therefore agreed as to the objective, which is the single and rather narrow point whether this Clause, as drafted, meets the point which the hon. and learned Gentleman has in mind and avoids any kind of injustice.
First, I think I should discuss subsection (3); its object is to define the withholding of supplies to include discrimination in the terms on which the supplies are available. Its purpose, therefore, is simply to expand the meaning of withholding supplies where it is used in subsection (1). It does not in any sense have the effect of prohibiting discrimination except on the grounds mentioned in paragraphs (a) or (b). I think that this achieves the point which was made by the hon. and learned Gentleman. I understand that the purpose of the Amendment is to make clear that the prohibition of withholding of supplies, or discrimination by a supplier in the matter of supplies, operates only where such withholding or discrimination occurs on the ground that the

dealer in question has been selling below the recommended price or is likely to do so. But in view of what I said in relation to subsection (3), I hope that the House—to put it in other words—will feel that subsection (1) has the effect that prohibition can apply only where the ground for withholding is that set out in paragraphs (a) or (b).
Having taken careful advice—as I am sure the hon. and learned Gentleman will appreciate—I am satisfied that the kind of injustice which he is anxious to prevent—we share his objective—does not occur in the Clause as drafted and that there is no room for misunderstanding in the matter. I hope, therefore, that the hon. and learned Gentleman will be reassured and feel able to withdraw his Amendment.

Mr. W. Wells: I should have felt happier had the form of words which we suggest be adopted. I am sure that the Minister has taken careful advice. We respect the sources of that advice even though they are not always infallible. In view of what the Minister has said, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. du Cann: I beg to move Amendment No. 11, in page 3, line 10, at the end to insert:
(a) if he refuses or fails to supply those goods to the order of the dealer.
I do not think that I need detain the House very long on this matter, as it was discussed very clearly—and, as I hope the hon. and learned Member for Edge Hill (Mr. A. J. Irvine) would think, fully—in Committee. I say that because I am happy to acknowledge that the fact that this Amendment now appears in the Notice Paper is due entirely to the hon. and learned Gentleman's prompting and to the careful work that he has been good enough to devote to this Bill. In Committee, he tabled an Amendment similar to this one, and he will recall that we then accepted the principle of his Amendment and undertook to put down our own Amendment later to deal with the point.
First, then, the tabling of this Amendment is in fulfilment of an obligation that I was responsible, on my right hon. Friend the Secretary of State's instructions, for undertaking in Committee. The object of the Amendment is to make clear that


the purpose in subsection (3) is to prohibit the enforcement of resale price maintenance either by outright refusal to supply as well as by refusal to supply except on discriminatory terms. I am sure that this Amendment improves the Bill, and again I acknowledge with gratitude the help we received in Committee from the hon. and learned Member.

Mr. A. J. Irvine: I am grateful to the hon. Gentleman for his words. It is always rather satisfactory in proceedings either in the House or in Committee when a point that an hon. Member thinks is valid is acknowledged by those opposite to him. I had no doubt, and I do not think that the hon. Gentleman had, that there was substance in my criticism of the original drafting. Any difficulty deriving from that is now removed, and I welcome the Amendment.

Mr. Paget: I find myself quite unable to welcome what is, in fact, the Amendment of my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine). I repeat that I feel it to be an outrage that a man should be compelled, against his will, to supply goods to a man who has proved himself untrustworthy, and of whose methods of dealing and behaviour he disapproves. I have never really taken any objection to Clause 1. I do not think that resale price maintenance—which is not illegal, and which is not made illegal by this Measure but merely made unenforceable by the courts—ever could have effectively been enforced by the courts, and that efforts to do so were generally misguided.
I think that people who go to the courts to enforce their contracts are generally misguided. My advice on matters of this sort is the advice I drew from my Quaker ancestors:
If thy fiend deceive thee once, blame him;
If he deceives thee twice, blame thyself.
That is the way businessmen should be guided, and when I find introduced into a Bill by an Amendment such as this a provision that compels a man to be deceived twice, it outrages my sense of justice.
Let us be quite clear about one thing. An agreement to resell at a certain price is a freely negotiated agreement. It is one that honourable men will observe.

The price-cutting people are dishonourable traders, and to compel a man to go on dealing with them is a moral outrage. I have said this before, and I repeat it now.

8.15 p.m.

Mr. H. Lever: Some of us are in some difficulty. Like my hon. and learned Friend the Member for Northampton (Mr. Paget), I find it irksome to disagree with our own Front Bench but equally irksome to agree with the Government Front Bench on this Measure. Being in this difficulty, I would rather emphasise my disagreement with the Government. Front Bench than my unhappy inability to achieve unanimity with my own.
I do not like this Amendment. I do not like it for the reasons that have been effectively and firmly put forward by my hon. and learned Friend the Member for Northampton tonight and on previous occasions and also because, yet again, we get evidence of the haste, lack of precision and indifference to well-established legal principle that is to be found all over the Bill and the Amendments in this "hotch-potch", as it has rightly been described to be.
After we have discounted the very courteous and reasonable manner of the Minister—it contrasts, sometimes, with the rather touchy manner of the Secretary of State—and come to the meat, we are asked to approve an Amendment—and I hope I have it aright; I missed a moment or two at the beginning of this debate dealing with the position when it is established that a dealer has acted as described in paragraphs (a) or (b). If that is to be incorporated in the law of the land, as I understand is to be the case—and I hope that I may be corrected here if I am wrong—I find it difficult to believe my eyes and ears—

Mr. du Cann: Perhaps the hon. Gentleman will allow me to assist him. His remarks are, in fact, being addressed to the last Amendment, of which the House has disposed, and not to that currently before hon. Members.

Mr. Lever: I did apologise—I was detained in the Lobby and missed the opening of this debate. I am very much obliged to the Minister who, with his


usual courtesy, makes it clear that Amendment No. 9 has been disposed of—that it has not been accepted—

Mr. A. J. Irvine: And I am relieved, although it has not disposed of the difficulty of my hon. and learned Friend the Member for Northampton (Mr. Paget).

Mr. Lever: I am obliged to the Minister for putting me right on this point, on which I shall not address any further remarks to the House.

Mr. Winterbottom: I must join issue on this Amendment. If I thought that the Government intended to accept our Amendment No. 15, in page 3, line 20, at end insert:
(4) Nothing in this section shall make it unlawful for a supplier to withhold goods from any dealer to whom he has not previously sold goods or who refuses or fails to comply with a requirement by the supplier that he shall pay cash or the equivalent of cash on order.
I should feel much happier. If they do not intend to accept it, it means that a supplier is compelled to supply a new customer with goods, whether he likes to do so or not. That is totally wrong, and utterly and entirely un-British. It is wrong from a business point of view.
When we last discussed this matter the Minister said, in effect, that he realised the position of a man who sought to contract with the supplier for the first time and that if a supplier would not contract because he was short of the goods that would be a reasonable excuse. But there is nothing in the Amendment or in the Bill which makes that a reasonable excuse and which incorporates a means of escape for the supplier who has not the goods to supply to a man who might come to him out of the blue, and say, "I want the goods from you. Here is the money for them and by law you must supply me." [HON. MEMBERS: "No."] That is how I interpret the Bill. If I am wrong I am ready to be corrected. I can see no provision at all in the Clause or in the Amendment to meet the reasonable difficulties of trade which the supplier might experience.
I know that the Minister has made provision for the cash and credit basis, but I am not dealing with that aspect.
I am dealing simply with the supply of goods. A man who has never been a trader before and who may be living on the fringe of a housing estate where regulations govern those parts of the estate which is a shopping area where the inhabitants may purchase their goods, may go from a private house to a wholesaler and say, "Here is the money. I want a supply of your goods", and under the Bill he cannot be refused.

Mr. H. Lever: It is certainly true that if he announced the intention of cutting prices the presumption would be that if the supplier had not supplied him he had not done so on that ground.

Mr. Winterbottom: Whether he is cutting prices or not, the supplier must supply him with goods for resale to the public.

Mr. Graham Page: I do not see how the hon. Member gets that out of the Amendment, which says only that if a supplier refuses to supply the goods he has withheld them. That is all that the Amendment says, not even that he has withheld them unlawfully.

Mr. Winterbottom: I am dealing only with a man who is a first customer, and that is why I have referred to Amendment No. 15, which makes clear that we do not want the accusation of withholding goods to apply to the supplier who is called upon to supply to a man for the first time. If the Government are prepared to accept that Amendment I am prepared to accept the Clause without further argument, but as the Clause stands a man who tries to contract with a supplier for the first time, with no recommendation or reference, provided that he pays cash, must be supplied with goods for resale to the public, according to a future Amendment to be moved by the Government. Perhaps the Minister of State, Board of Trade, will correct me if I am wrong.

Mr. H. Lever: My hon. Friend is not wrong. That is the whole purpose of the Clause.

Mr. Winterbottom: I hope that the Minister of State can tell me whether these provisions apply to a man who is approached for the first time to supply these goods.

Mr. du Cann: The hon. Gentleman requests me to interrupt him briefly. It was not my purpose to speak again, because we are directing our attention to a limited Amendment. I think the hon. Gentleman has forgotten some of our earlier discussion in Committee in relation to these matters, and I ask him to look possibly at a later Amendment, No. 14, to recall the earlier discussion and, indeed, to see precisely what Clause 2 endeavours to do. The rubric to that Clause states that it is a
Prohibition of other measures for maintaining resale prices.
In fact, the whole Clause is directed towards price cutters. Obviously there may be other legitimate reasons why suppliers should wish to withhold supplies. I thought this was well within the understanding of the House.

Mr. Winterbottom: When I raised this matter in Committee I received from the Minister an assurance that there would be incorporated in the Bill an Amendment which would make it clear that even under Amendment No. supplies to a new customer on the ground, for instance, of shortage of stock. When I look at Amendment No. 14, what does it say?

Mr. Deputy-Speaker: Order. I am sorry, but we cannot discuss Amendment No. 14 until we reach it.

Mr. Winterbottom: I am sorry that I cannot discuss that Amendment. In no future Amendment can the Minister of State show me any escape route for the wholesaler who wants to refuse supplies to a new customer. Even in Amendments that have already been discussed in Committee, and in any future Amendments which may be contemplated, there is nothing which specifically exonerates the supplier of goods for supplying to a new customer for the first time if the customer pays him cash. If that person is prepared to pay for the goods, he can, under the terms of every Amendment to Clause 3, demand supplies from the wholesaler or the manufacturer.
I challenge the Minister of State on this point. I want to make it perfectly clear that a wholesaler could withhold 14, which I cannot discuss at the moment, there is no specific provision which makes clear that the dealer can

escape from the challenge of a new customer who may be transferring his affections from a previous wholesaler, perhaps because of certain difficulties, and who by transferring to the new wholesaler may involve him in similar difficulties. There is no safeguard to the wholesaler under the terms of any provision of this Bill or of any Amendments yet to come.

8.30 p.m.

Mr. A. J. Irvine: May I, by leave of the House, speak again on this matter?
The Government have put forward an Amendment which the Minister was good enough to say derived from recommendations I had previously advanced. I welcomed This Amendment but, subsequently, much to my surprise, I found that it was strongly criticised by my hon. and learned Friend the Member for Northampton (Mr. Paget) and my hon. Friend the Member for Sheffield, Bright-side (Mr. Winterbottom), fortified by another of my hon. Friends, albeit that he was speaking to another Amendment.

Mr. H. Lever: I agreed with them.

Mr. Irvine: I desire to make quite clear, therefore, why we originally wanted this change and why we welcomed it, although I am well aware that the reasoning which prevailed with us is well understood by my hon. and learned Friend and my other hon. Friends. The point is that we are dealing here with withholding, not with unlawful withholding. As regards the issues raised by the concept of unlawful withholding, we have one recommendation after another to offer to the House, as we had in Committee. I agree very much with my hon. Friends in the view which they have indicated towards the matter of unlawful withholding.
What we were confronted with in the original drafting of subsection (3) was a defining of "withholding", but the definition failed to comprise the most obvious case of withholding of all, namely, the occasion when supplies were simply cut off. We thought it right to draw attention to this defect. I am sure that my hon. Friends will agree that it would be foolish to provide in the Bill that it was a withholding to and on terms and conditions specified refuse to supply goods except at prices and not a withholding to refuse simply to supply the goods. No reasonsable


hon. Member could possibly argue for such a proposition as that.
It was to meet that unanswerable point that the Government put the Amendment down. I am bound to say that nothing I have heard has altered my disposition to welcome it.

Amendment agreed to.

Mr. du Cann: I beg to move Amendment No. 12, in page 3, line 14, to leave out "available" and to insert:
at or on which he normally supplies those goods".
Would it be convenient, Mr. Deputy-Speaker, if we discussed this Amendment and Amendment No. 13, in page 3, line 18, after "than" to insert
that in which he normally treats
at the same time? They run together, and we did have a discussion on them together in Committee.

Mr. Deputy-Speaker (Sir Robert Grimston): Yes, if that is agreeable to the House.

Mr. du Cann: We have tabled these Amendments to fulfil an undertaking which I was responsible for giving in Committee, again on the instructions of the Secretary of State. Their whole purpose is to clarify the provisions of Clause 2(3,a) and (3,b). The need for this clarification was brought to our attention by Amendments put down in Committee by my hon. Friend the Member for Bath (Sir J. Pitman) but not in fact moved at that stage. However, my hon. Friend made certain references to them when speaking on the Question, "That the Clause stand part of the Bill." In the light of the examination of the Amendments which we made at the time and the views expressed by my hon. Friend, my right hon. Friend felt that there was substance in the point that the Clause as originally drafted contained a defect of ambiguity.
As regards the first case, that defined in paragraph (a), we felt that it might not be entirely clear that the comparison was with terms available from the supplier concerned and not with those which dealers might be able to get from other suppliers. The first Amendment puts that point beyond doubt.
In both cases, the Amendments also make clear that the comparable terms

are those on which the supplier concerned normally does business; in other words, no account will be taken of terms only exceptionally available. I hope that the House will feel that these Amendments improve the Bill. That is certainly our opinion. I should like again to acknowledge the help and assistance which we derived from my hon. Friend the Member for Bath. We are grateful to him for drawing these matters to our attention.

Mr. A. J. Irvine: Our inclination is to welcome the Amendment. We think that it is right. As the Minister readily acknowledged, it is not a drafting Amendment. It has quite important consequences, and it reduces the mischief of the Clause.
As the Clause was originally drafted, it was concerned with conditions significantly less favourable than those available to other dealers offered by any supplier. That was how we read it and how it was correctly construed, I think. That might well have had unfortunate results. Now, as I say, the mischief of the Clause is diminished, and the test applied is the standard of practice of the supplier in question. This seems to us an improvement, and we welcome it.

Mr. H. Lever: I, too, welcome the Amendment as far as it goes. It can be succinctly said that it makes the Clause go from worse to bad, and therefore, if one is to assess the relative merits of the Clause, one must say that the Amendment is an improvement. The Clause would be worse without it. It is bad with the Amendment, but without it it would be very bad.
It is worth underlining the haste with which the Government botched the Clause together and threw it before the House. Originally, the Clause obliged a man, on pain of being sued for every penny that he had, to supply goods to practically anybody, especially to a price-cutter, who is placed in a more favourable position in this Bill compared with anybody else. Presumptions are raised in his favour which would not be raised for anybody else. Without this Amendment, the Clause would oblige a man to supply a price-cutter, on pain of being sued for limited sums of damages, on terms as favourable as those on which anybody in the business is supplying anybody else in the business.
May I put it in this way. Suppose that a manufacturer carrying on a perfectly reputable business is approached by one of the seediest and shadiest men in the trade who wants supplies from him. Having carefully announced that he is a price-cutter, and having raised in his favour the presumptions which can be especially raised in favour of price-cutters by this Bill, he would, under the Clause if it were unamended, demand that he be given the same terms, on which the manufacturer in question was supplying to anybody but on which some other manufacturer was supplying to I.C.I., for example. This seedy, shady individual could say, if the Clause were unamended, "I know that you have never supplied anybody on these terms, but Smith supplies I.C.I. on these terms and I want them". The Bill as it passed through its Second Reading and Committee stages actually enacted that. This was the outrageous nonsense which the Secretary of State had managed to push through the House up to the Report stage.
Now the Clause is significantly better. As I say, it has gone from worse to bad, but it must not be thought that the Amendment cures the mischief and fundamental evil of the Clause. It at least says that a man cannot go to a manufacturer and say, "You must supply me, not on the terms on which you are supplying I.C.I., but on the terms on which somebody else is supplying I.C.I." Before he can get an action for damages on its feet, he is obliged to assert that the manufacturer is supplying somebody as reputable as and substantial as I.C.I. on these terms and that he wants them. I hope that hon. Members opposite will agree with me. I have not been hesitant in saying that they have played a very courageous and praiseworthy part in improving the Bill to conform more to my taste and in mitigating some of its evils.
Everybody will say that if he does not get the goods it is a case of withholding, and not necessarily unlawful withholding. I accept that. All that happens is that there is a prima facie case for damages against me if I, the manufacturer, refuse to supply. Unless I prove the contrary, at great expense and risk to myself, unless I prove that I had other good reasons for not supply-

ing the man, it is assumed against me that I have refused to supply him because he is not a price-cutter.
Incidentally, I have the first ingredients of withholding if I do not offer him as good terms as other regular customers are getting who have been trading with me for a long time. I am placed in peril if I do not give some seedy intruder as good terms. That will be the position even with the Amendment. What is worse is that not merely must I give him as good terms as I give to other people. The mischief which will still remain after the Amendment is made, apart from the mischiefs which I have mentioned, is that characteristically, as in many other points of the Bill, its penal and damaging provisions are of a vague and ill-defined nature. Here again, there is the same hasty, ill-defined disregard for people's rights. A man's rights depend not merely upon what the lawyers or the courts say after they have been argued about. A man's rights depend upon what he understands his rights to be.
If a man is led to believe that he would be ruined if he does not supply a shady individual, his rights have been effectively taken away from him even though, if he had the courage to litigate the whole matter and risk being ruined, he might have had a triumphant action out of it. Therefore, we should not seriously interfere with people's business and expose them to unlimited claims for damages. We should define with great terms of precision the terms on which the liability arises.
The Amendment does not add to the precision of that. Subsection (3,b) of the Clause states:
although he contracts to supply the goods to the dealer, he treats him in a manner significantly less favourable than other such dealers in respect of times or methods of delivery or other matters arising in the execution of the contract.
In anything to do with the execution of the contract, therefore, the supplier must not treat the dealer significantly less favourably than he treats his other customers.
What does that mean? Does that mean if the supplier's other customers are treated with great courtesy, given a cup of tea and a seat while they wait and their invoice is being written out, the treatment would be held to be signifi-


cantly different if someone else were made unwelcome, treated in a surly and snappy fashion and told to wait outside in the rain?
Is it significant if a supplier says to a customer whom he does not want, but whom the Government force him to accept, "Get to hell outside; I am obliged to serve you, but I do not like anything about you, your smell or your business methods"? The manufacturer might, not unreasonably, be inclined to say that. We have had compulsory loans in the dark days of our history, but we never before had compulsory customers or were obliged to supply people whom we detested. The more detestable these people are, the better their claims for damages afterwards. So it is enacted in the Bill.
Will the Amendment cure this evil of the Clause that a man may be accused of treating a customer significantly less favourably if he tells him to wait outside in the rain compared with the man who is not breaking his promise at every favourable opportunity and who is invited to sit in a chair, treated with courtesy and given a cup of tea?
8.45 p.m.
I should like to know, what does it mean? If I am a manufacturer I want to know what it means. How far can I express my dislike of this customer the Government are forcing upon me without being sued for damages? How far do I have to be well-mannered towards him? Do I have to call him sir? If I do not, am I treating him significantly differently? We ought to have some clarification of all this.
It is true that the ludicrous wideness of the Clause, so evil, so unthinkable in its drafting as it originally stood, and as it stands at this moment, till the House amends it—it is true that the mischief of that will be reduced, as I at once concede. Therefore, I shall not oppose the Amendment, but I think that the House ought to be in no doubt that it remains a wicked Clause, a Clause with evil effects, which brings unprecedented novelties into our commercial life. It does so in language which is so vague, ill-defined and dangerous that it makes me doubly apprehensive of the functioning and the purpose of the Bill and the Clause.

Mr. Paget: I find myself in considerable agreement with my hon. Friend the Member for Manchester, Cheetham (Mr. H. Lever) when he says that these Amendments make a bad Bill less bad. I recognise that in that sense they are an improvement, but, none the less, I think that this Clause probably will still be the worst Clause on the Statute Book. Really, this sort of doctrinaire pursuit of the idea that unlimited competition designed to compel the strong to drive out the weak is really going ultimately to produce lower prices for the weakest chap of all, who is the customer, seems to me to be an odd delusion in any terms other than the extremely doctrinaire ideas of the Liberal Party which now seems to have passed on to what was once the Tory Party's Front Bench. I thought that that sort of idea had been rejected by almost everybody but when I see that kind of idea being enforced by a Bill—

Mr. Deputy-Speaker: Order. I am sorry to interrupt the hon. and learned Member, but I think he is getting a little wide of the Amendment. Perhaps he can explain to me how he is relating his remarks to it.

Mr. Paget: I entirely agree, Mr. Deputy-Speaker. My observations were introductory. Now I will try to straighten them out to meet the point.
I was trying to say that I thought the general objective pretty poor, but when by this Clause it is sought to achieve that object by placing a premium on dishonest conduct over honest conduct I think that the limits of bad legislation are about being reached, because what this Bill does is to prefer the man who has behaved dishonourably—

Mr. Deputy-Speaker: I am sorry, but the hon. and learned Member, despite his saying that he agreed with me, seems to me to be carrying on just as before. Could he really direct his remarks to the Amendment?

Mr. Paget: With great respect, Mr. Deputy-Speaker, what this is saying here is that the supplier shall be compelled to deal on his best terms—on what, in international trade, is the most favoured nation treatment—with a dealer merely because that supplier can establish that


the dealer has broken his word with regard to resale price maintenance on previous occasions.
That seems to be an extremely bad thing to do. It not only places a premium on dishonesty so far as the customer is concerned. It also places a premium on dishonesty so far as the supplier is concerned. If the supplier gives the true reason, which is "I do not like the way you deal. I do not like dealing with people who are not men of their word", then he can be sued, but if he thinks up any other reason under the sun and tells a lie he cannot be sued.
To create an instrument of this sort, which is designed to favour the least honourable people on both sides of the deal, seems to me to offend against every idea of probity in business. This seems to undercut every conception we have that business dealings should be by men of their word who tell the truth. Here the advantage is given to people who are not men of their word and do not tell the truth.
This is a very bad Bill, and we ought to recognise that this improvement is a very slight one.

Amendment agreed to.

Further Amendment made: In page 3, line 18, after "than", insert:
that in which he normally treats".—[Mr. du Cann.]

Mr. du Cann: I beg to move Amendment No. 14, in page 3, line 20, at the end to insert:
(4) For the purposes of this Act a supplier shall not be treated as withholding supplies of goods on any such ground as is mentioned in subsection (1) of this section if, in addition to that ground, he has other grounds which, standing alone, would have led him to withhold those supplies.
If I night first rise to a point of order, Mr. Deputy-Speaker, the right hon. Member for Battersea, North (Mr. Jay) made the point that it might perhaps be not entirely convenient for the House if Amendment No. 15 were discussed with this one. I think it is proposed that they should be discussed together, but I wonder if I might make a suggestion which might assist the right hon. Gentleman and the House. I hope I have not misunderstood the position.

Mr. Jay: Further to the point of order, Mr. Deputy-Speaker. I thought from what you said a moment ago that we were taking these two Amendments separately.

Mr. Deputy-Speaker: I understand that the original intention was that they should be discussed together but that the right hon. Member for Battersea, North (Mr. Jay) preferred that they should be taken separately, and Mr. Speaker agreed that that should be done.

Mr. du Cann: I beg your pardon, Mr. Deputy-Speaker. I had not understood that. That is why I was rising to make a suggestion which I hoped would be helpful and meet the position. If we are dealing with this Amendment on its own, then the matter is dealt with. I will deal with this Amendment as rapidly as I can so that we can proceed with Amendment No. 15, in which I know right hon. and hon. Members opposite are interested.
The Amendment deals with what I might call the mixed motive point. It will add a new subsection to Clause 2. The Clause makes it unlawful for suppliers to withhold goods from dealers or discriminate against dealers who do not observe recommended resale prices. The object of the Amendment is to clarify the position of a supplier who withholds supplies or discriminates for mixed motives; that is to say, both because the dealer is not observing recommended resale prices and for other reasons. I will be a little more specific about other reasons in a moment.
The new subsection makes it clear that such a supplier shall not be regarded as acting unlawfully if he would have withheld supplies or discriminated for other reasons unconnected with resale price maintenance. It will be within the recollection of the House that we had a very substantial discussion in Committee. I remember in particular speeches by my hon. Friends the Members for Crosby (Mr. Graham Page), Buckinghamshire, South (Mr. Ronald Bell) and Twickenham (Mr. Gresham Cooke)—all three of whom I am pleased to see present—my hon. Friend the Member for Bedfordshire, South (Mr. Cole) and my right hon. Friend the Member for Thirsk and Malton (Mr. Turton). I also remember a speech on the same subject by the hon. Member


for Manchester, Cheetham (Mr. H. Lever), who has again honoured us with his presence this evening.
We had a substantial discussion about this point. Our attention was drawn to the position of the supplier who may withhold supplies for a number of legitimate reasons of ordinary commercial practice. Perhaps I may give one specific example. The case was mentioned of the supplier who withholds supplies from the dealer because he knows the dealer to be insolvent and also because the dealer is selling goods below the recommended resale price. The position will be, if the House sees fit to accept the Amendment, that it will be clear henceforth that where there are other reasons which, standing alone, would have led the supplier to withhold supplies, the withholding will not be unlawful.
This is, I hope, the exact fulfilment of the undertaking given in Committee to my hon. and right hon. Friends and others both by the Secretary of State and myself that we would deal with the matter. I hope that the House thinks that right and that the hon. Member for Sheffield, Brightside (Mr. Winterbottom), to whose intervention on the last Amendment I listened with great interest but with which I am bound to say I very largely disagreed, will feel that we are attempting here to meet some of the dangers which I know he has very much in mind from his deep experience of these matters.

Mr. A. J. Irvine: It was my intention to put a question to the Minister on a subject which puzzled me. I think that the Government are right to deal with the matter of mixed motives. That will be a very common event, and it is right that the situation should be dealt with.
The difficulty which I am in, speaking for myself, is that I cannot see why, where there are mixed motives, the determining consideration should not be which is the paramount motive amongst many—one among many. If in the context of mixed motives there is one motive which is paramount, it does not at all follow from that situation that standing alone it would have been sufficient to convince the supplier to behave in a certain fashion. In other words, the matter of paramountcy can surely be tested without going to the

point to which the Government's proposal goes of requiring that a motive which may be a paramount motive has the effect of which the Minister speaks when standing alone.
My right hon. Friends and I would like to know what is the Government's purpose. Why is it necessary to introduce this proper concept of paramountcy to deal only with the case of a motive which has the particular effect when it is standing alone?

Mr. Winterbottom: In a sense I am sorry that we are not discussing Amendment No. 15 with this Amendment because I could have asked for clarification of Amendment 15, which is passive, whereas this Amendment is nebulous. The Amendment says
…if, in addition to that ground, he has other grounds which, standing alone, would have led him to withhold those supplies.
What does that mean? It means that when the case comes to a Restrictive Practices Court, the judge will have to decide whether those grounds are good and sufficient. The judge will have only one positive assertion to guide him:
if he refuses or fails to supply those goods to the order of the dealer".
In court, one cannot argue what was said in Committee or in the House by the Secretary of State or the Minister of State.

Mr. Maxwell-Hyslop: How does the Restrictive Trade Practices Court come into this?

9.0 p.m.

Mr. Winterbottom: I am speaking of the judgment. I am saying that this provision is nebulous and that what we want is something positive to give a clear lead to protect the wholesaler. No doubt the Amendment conforms to promises made in Committee, but it is nebulous and something much more positive is required. We should have provisions for the protection of the supplier, manufacturer or wholesaler, clearly defined. He should have positive protection in this Clause in the same way that there is a positive provision about the withholding of supplies. I wish that Amendment No. 15 had been taken with Amendment No. 14, because in Amendment No. 15 we would have had something to protect the wholesaler


instead of this nebulous uncertainty which may finally have to be resolved by someone outside the House.

Mr. Angus Maude: Like the hon. Member for Sheffield, Brightside (Mr. Winterbottom), I also very much regret that the Opposition Front Bench interfered with the Chair's original grouping which put Amendments Nos. 14 and 15 together. Taking them separately will make it extraordinarily difficult to get a comprehensive discussion of the points which many of us wish to meet. Amendment No. 15 goes too far, while Amendment No. 14 goes scarcely far enough. If we had discussed them together, it might have been possible to have arrived at some clear understanding of the way in which we could fairly and satisfactorily meet this problem.
What seems to be a possible deficiency of the Government Amendment—and I should like some reassurance about this—is that it does not quite meet the case of the supplier who has never before done business with a distributor and who is blackmailed into supplying him by the threat of having to take legal action in order to prove that it is not because the distributor is a price-cutter, or a suspected price-cutter, that the supplier is not supplying him. I agree that it is very difficult to make a black and white division between those whom one has supplied before and those whom one has not. This increases rather than reduces the difficulty for the simple reason that it would enable a supplier to refuse supplies to a new distributor without inviting proceedings under the Clause as it would have been amended. This must be wrong, because it would enable the supplier to take steps to prevent the introduction of new distributors, who might be more modern and more competitive in every way, into the trade. I think that it must be wrong to go as far as that, but surely there must be some half-way house in which we can deal with the things which are obviously worrying hon. Members on both sides of the House.
I think that it is a justifiable complaint—and many suppliers have put this—that it is putting them in grave jeopardy and to great expense and trouble if they can be almost blackmailed by a distributor with whom they

have never done business, simply on the ground that they might be judged to have been motivated by the fact that the chap was a price cutter, or a possible price cutter.
I am not clear—though I am open to persuasion on this—that the Amendment wholly meets that point. It is true that the supplier might be able to say to the Court that the reasons why he had not previously supplied a distributor were good and sufficient reasons which, standing on their own, were conclusive. But, on the other hand, it may be that he had not previously supplied that distributor, for the simple reason that he had never heard of him, or that the distributor had never placed an order with him or asked to be supplied, and had he previously placed an order with him and asked to become a distributor, the supplier might have perfectly good and proper reasons for deciding that he did not want to deal with him.
It seems to me now that when he is approached for the first time after the passage of the Bill he will be in a very nebulous position indeed, because the Amendment does not wholly protect him against what might be a thinly disguised form of blackmail. I feel that the Amendment which is to be taken next goes too far in this respect, but I hope that the Government will consider whether it is possible to go a little further than this Amendment goes, or, if I am wrong in my belief that what they are seeking to introduce is inadequate, that they will be able to convince me that that is so.

Mr. John Stonehouse: My hon. Friend the Member for Sheffield, Brightside (Mr. Winterbottom) said that this was a rather nebulous Amendment. I disagree with him. I believe that it is a most important Amendment, and that if it is accepted it will have the effect of making Clause 2 almost completely worthless, because if a supplier is really anxious to continue some form of price fixing of his commodity to retailers, and anxious to stymie the activities of the firms which he suspects are going to price-cut, or who have had price cuts on his goods, it will be easy for him to find some other reason for withholding supplies.
If I read the Amendment correctly, the onus seems to be on the supplier.
If he has other grounds which, standing alone, would have led him to withhold his supplies, it is the supplier who makes the decision. If the supplier in his own judgment determines that there are just reasons why he should withhold the supplies, he can make up those reasons.
Let me give the House a few examples. Consider the example of a supplier of a Shampoo Master who expects retailers to have a mark-up of 87½ per cent. He is unhappy because a supermarket has obtained Shampoo Masters and is selling them at a mark-up of 25 per cent. He then makes a policy decision to the effect that he wants his Shampoo Master to be sold only by hardware dealers who sell the particular brand of detergent that goes with his machine. This is a policy decision, and he would make it—he would say—in order to protect the service that goes with the product that he supplies. It is his decision, and it is a policy decision.

Mr. H. Lever: Why should he not do so?

Mr. Stonehouse: My hon. Friend asks why he should not do so. If he can do that, the Clause is absolutely worthless. It means that an individual who intends to price-cut can have his supplies withdrawn, as a result of a policy decision which is really an excuse invented by the supplier in order to withhold supplies.
This is a very important Amendment. If it is accepted it will be possible for any supplier to find reasons why he should not supply goods. A supplier of a well-known brand of shirt, such as Rael-Brook or Tern—which is sold with a 100 per cent. mark up—may decide that he does not like the activities of a supermarket which sells his shirts at a mark-up of only 25 per cent. He therefore decides to sell only to shops which stock a wide range of men's wear, including ties, socks and the rest, thereby making a policy decision and withholding supplies from a shop which makes a quick turnover because it sells only shirts.
If suppliers can invent excuses of that kind the whole Clause becomes completely worthless. Furthermore, as the whole Bill depends upon the effective-

ness of the Clause—hon. Members will remember what Professor Yamey said about the importance of the withholding of supplies point—the Bill in turn will become worthless, if—and I agree that it is a big "if"—supplies and manufacturers who want to maintain r.p.m. use their powers under the Bill as they will be able to use them if the Amendment is accepted. My hon. Friend may think that this is a nebulous Amendment. I invite him to read it again. It is a far-reaching Amendment.
We must also consider the case of the co-operative societies, which have had supplies denied to them because suppliers or dealers suspect that under their dividend arrangements with their own members they are engaging in some sort of price cutting, whereas they have profit sharing arrangements with their members. Under the Bill as originally drafted a co-operative society could insist on obtaining supplies. That was extremely good. Why should co-operative societies, which provide mutual services for consumers, be denied supplies? If the Amendment is accepted, a firm can make a policy decision not to supply mutual societies or co-operative societies, or mail order firms.
If it is accepted it will be possible for the recommended price to be the effectively imposed price, because supplies can be withdrawn if the price is not maintained. Hon. Members who have studied Professor Yamey's work on this matter—and he is the expert in the business of r.p.m.—will remember that his key point is that unless it is made impossible for dealers to withhold supplies in the event of price cutting, all the legislation in the world directed against the imposition of r.p.m. will be worthless. I submit that this Amendment, if accepted, would weaken, or almost completely destroy, the provisions of Clause 2 from the point of view of larger manufacturers determined to take advantage of them. It would therefore make the Bill worthless, and I ask that the House give this matter serious consideration.

9.15 p.m.

Mr. Graham Page: The hon. Member for Wednesbury (Mr. Stonehouse) seemed to desire to control the business of suppliers rather than to attack resale price maintenance as one aspect of trading. All this Bill does is to deal with resale


price maintenance as an aspect of trading. It does not attack the whole business of supplies from the wholesaler to the dealer. I am grateful to my right hon. Friend for introducing this subsection in response to an undertaking to look again at the points which were raised during the Committee stage discussions.
I consider this a wise and proper Amendment. The position was that if a supplier quite honestly said, "I do not want to supply this dealer because I know that he has been price-cutting", but there were many other reasons why the supplier did not wish to supply a dealer—many proper business reasons—had the Bill remained as drafted there would have been a doubt whether merely saying that price cutting was a reason would have laid the supplier open to a charge of unlawful withholding. There may be many other very good reasons of which one has been mentioned, the financial instability of a dealer. That comes up under another Amendment—

Mr. H. Lever: It is nothing to do with good reasons, it is any reason which the supplier thinks is a good reason.

Mr. Page: The supplier has to justify his reason, and it may be challenged in the courts. If he has a reason which stands alone, if he has a genuine reason, he has to prove it in full.

Mr. Lever: The Amendment says,
…which, standing alone, would have led him to withhold those supplies.
It is not a question of a reasonable man or an upright man, or having to do with good reasons.

Mr. Page: He has to satisfy the court that, in fact, it has led him to that decision. If a supplier has said that because a dealer was price-cutting, and only because of that, he refused to supply the dealer, he would be perjuring himself and not satisfying the Court that it was true—

Mr. Paget: He does not have to show his perjury or anything of the sort. Suppose a supplier says that he does not want to supply a dealer because he does not like Jews. That is a perfectly good reason, and if he could convince the Court that he was sufficiently anti-Semitic he would succeed.

Mr. Page: If he could satisfy the Court that, in the words of the Amendment, it
led him to withhold those supplies
why not? He used that reason. There are other commercial reasons—

Hon. Members: No.

Mr. Paget: There is nothing about commercial reasons—

Mr. Speaker: Order. I think it desirable that only one hon. Member should speak at a time and that none should speak from a sitting posture. Mr. Page.

Mr. Page: I am obliged to you, Mr. Speaker. May I detail the sort of reasons which I have in mind which are most likely to come in question in connection with this matter? There might be an insufficient market. The dealer might be ordering in too small quantities to make it economic for the supplier to supply him. There may be transport difficulties. There may be bad storage facilities at the premises of the dealer so that the goods would be in a bad condition when sold and the supplier would get a bad reputation in respect of his goods. Those are the sort of commercial considerations which, if they really led a supplier to withhold goods, we should make permissible.
The words, "standing alone" may raise some difficulty. I hope that I shall not trespass an the provisions of another Amendment, but suppose a supplier says to a dealer, "You have been price-cutting and for that reason I think that you are going 'bust'—you are ruining yourself by doing so. You are not creditworthy and therefore, because I think that you are not creditworthy, I shall refuse to supply goods to you." I am not concerned whether that would be standing alone under this section. It is probably as a result of price-cutting and might not come in as a separate ground in the proposed Amendment. Perhaps my hon. Friend would deal with that point, if to do so would not be going too far outside the terms of the Amendment.
The hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) raised the problem of paramountcy. It is difficult enough for the Court to discover a genuine motive—I think that the Court has to discover a genuine motive despite what hon. Members opposite have


been saying—without putting the rather impracticable task on the Court of discovering the paramount motive. If there is a motive which has led the man to refuse supplies other than the fact that the dealer was price-cutting, then he should be able to come within this Amendment and not suffer the penalties of unlawful withholding.

Mr. Jay: The discussion of this Amendment illustrates the extraordinary difficulty we get into when we try to legislate that people shall trade against their will. The problem is difficult enough already; and I must say to the Minister that if we tried to discuss together this Amendment, which is wholly concerned with motive, and the next Amendment, which is concerned with the question of whether a person should be compelled to trade with people with whom he has never traded before, I think that the confusion would have been even worse. I hope that I am right in that.
The Government have at least tried to improve the situation as compared with the previous state of the Bill, but I am not absolutely certain that they have succeeded. As the Bill was first introduced, a man was held to be unlawfully withholding supplies if he acted on the ground that the dealer had reduced prices below the recommended price. I do not like the phrase "price-cutting" because it suggests that there is something dishonourable or discreditable in reducing prices. I do not think that it is morally, legally or in other sense more discreditable to reduce prices than to raise them. What we are talking about is selling below the recommended price. Therefore, the question arose: "Was he acting on those grounds if he both had this motive and certain other motives?"
The Minister has tried to meet that by saying that he is not acting on that ground, if, in addition, the man had other motives which would by themselves have induced him to withhold supplies. This illustrates the point to which we have now got. The supplier, first, has to prove his case—the onus of proof is on him—secondly, he has to prove his motive—the state of his mind—and, thirdly, he has now to prove what his motive would have been had the circumstances been other than what they were. I am not saying that this is

an absolutely impossible proposition—I am not a lawyer—but it illustrates the point to which we have been led. I still have serious doubts whether this is really the best solution.
I should like to put two other questions to the Minister arising out of the discussions we have just had about paramountcy. I think that probably what the House wanted to do was to say that the supplier was unlawfully holding supplies if his paramount motive for doing so was the belief that his prices would be reduced below the recommended price. The Minister has tried to define paramountcy by this phrase:
…if in addition to that ground, he has other grounds which, standing alone, would have led him to withhold those supplies.
Has the Minister done what he intended? If we put those words in this Clause, are we not in the position that there might be circumstances in which the suppliers paramount motive was in fact the fear that prices would be reduced? If he had other minor motives which, had the paramount motive not been there would have led him to withhold supplies he would, according to the Amendment, be entitled so to do. We therefore now have the position that even if the paramount motive was that which the Bill seeks, to put it crudely, to make unlawful, but there were other reasons—because perhaps he did not like the co-ops, or whatever other reason there might be—he would be permitted to withhold supplies. Is the Minister sure that he is here doing what he intends to do?

Mr. Cole: Surely, the position is that these other grounds are such that would stand alone even if the paramount motive was not there at all.

Mr. Jay: We then reach the position that the major and paramount reason is the one mentioned but that there may be others, and that, if the major reason were not there, the minor ones would have induced the supplier to withhold supplies, then, even though fear of price-cutting was the major motive, the supplier would be entitled to withhold supplies.

Mr. Cole: I may not have made myself quite clear. I believe that the court is intended to take notice of what the right hon. Gentleman calls the minor reasons assuming that the major reason


of non-maintenance of prices never existed. In other words, one of these would be enough standing alone.

Mr. Jay: I should have thought that the words meant that the other motives had to be such that had the major motive not existed those others would of themselves have been enough to induce the supplier so to act. If that is so, I do not think that the Minister is doing what he intends to do.
The other, perhaps slightly less important point is this. Ministers are always criticising the drafting of Opposition Amendments, but here I am little inclined to criticise the drafting of the Government Amendment. Line 2 of the Government Amendment states:
For the purposes of this Act a supplier shall not be treated as withholding supplies of good on any such ground as is mentioned in subsection (1) of this section…
I draw attention to the words "on any such ground". Would it not be more accurate, and more in accordance with the rest of the Bill, if we simply spoke of "the ground mentioned"?
In Clause 2(1) we simply have the words
…on the ground that the dealer…
and if we take the corresponding passage at the end of Clause 4 we find the words:
…supplies were withheld on the ground that the dealer…
Are we not introducing a further possible ambiguity by suddenly slipping in here the words "on any such ground"? Might not the view be that those words meant something similar but not quite the same as is referred to in Clauses 2 and 4? I only mention this because the thing has become so complicated already that we do not want to introduce further ambiguities now. I assume that the Minister's motives on this occasion are good—but I do not want to confuse things further by introducing motives in that sense.

Mr. H. Lever: There appears to be some confusion. My hon. Friends seem to believe that this is a Bill to outlaw naughty people in their commercial relationships, and to prevent them from refusing to deal with people with whom they do not want to deal on any particular ground that seems right and reasonable to themselves. The Bill does not purport to do anything of the kind.

It is a Bill that purports to enforce supplies to people who, it is thought, would be refused supplies on the ground that they would cut prices. In other words, nobody has yet thought it necessary to enact that a supplier shall be compelled to trade with people whom he dislikes generally, irrespective of the question of price maintenance.
9.30 p.m.
I should have thought that the hardened supporters of eighteenth century trading methods would have been satisfied that the supplier had been adequately penalised in that, for no good reason that I can see, if a man who announces himself a price-cutter asks for supplies it is assumed against the supplier that he refuses to supply on that ground. That is an unjust and unfair presumption. So much has been confided to the Court in this matter that we might have confided this, without prejudging the issue why the supplies are refused.
I should have thought that my hon. Friend the Member for Wednesbury (Mr. Stonehouse) would have been happy to know that the supplier, before he refuses supply to the price-cutter, knows that he is liable to heavy damages unless he discharges the onus of proof placed upon him, namely the prima facie assumption that he refuses supplies because of price-cutting.

Mr. Stonehouse: I am grateful for my hon. Friend's remarks, but he seems to misunderstand the purpose of the Bill, which is to allow retailers, if they so wish, to cut the recommended price of the suppliers. If the suppliers for some good or bad or invented reason can cut off the supplies, they can determine who is going to sell their goods and they can dictate to them the price at which the goods are to be sold. If my hon. Friend does not realise that, he does not understand how price-fixing is carried out today by the pressure of dealers on retailers, with the ultimate sanction that supplies can be withdrawn.

Mr. Lever: It is becoming exceedingly difficult for me to put forward an argument in this debate. Earlier today I was told that I had no business to speak because I had not spoken before—[HON. MEMBERS: "Oh."]—I mean on the Bill. I am told that there is no point in my


attending now because I did not attend earlier. On that ground the Minister of State was earlier seeking to disqualify me from exercising my duty. Now I am told that if I have not read a certain professor on this subject I am disqualified from expressing any view. I do not accept these disqualifications.
To answer my hon. Friend's point, he is quite mistaken in supposing that the Bill enacts that a person must supply anybody in all circumstances with goods in case refusal to supply in any way assists price maintenance. This is not what the Bill intends or pretends to achieve. The Bill forbids a person to refuse to supply goods on the ground that the retailer will cut the price if he is supplied. I thought that my hon. Friend would have been quite happy, if a man is a known price-cutter and he announces that he intends to cut prices, that the supplier would not be entitled to refuse him on that account and that only if he showed that he had other grounds which, standing alone, would have led him to withhold the supplies would the supplier be entitled to do so.
Incidentally, in reply to the hon. Member for Crosby (Mr. Graham Page) there is nothing in the Amendment about "good grounds". A man does not have to have good grounds. The hon. Member for Crosby is so well intentioned that he drafts words into the Amendment which are not there. All that the Amendment says, and I entirely applaud it for saying it, is that if, on grounds other than price-cutting, a supplier does not supply the man who wants to be supplied, there is no reason why he should be forced to supply. Even the Bill—and let us assume that I am in favour of it—states that supplies shall not be withheld on grounds merely of price cutting. So far as I know, when the Bill was introduced it was never suggested that people should be forced to supply others whom they did not want to supply on totally different grounds.
An hon. Member said that a man might invent grounds. A man may invent as many grounds as he likes, but the onus of proof is upon him to satisfy the Court of those grounds. He has got to satisfy a sceptical High Court judge, who has been instructed by this House to presume to the contrary, that there are

grounds which would honestly cause him to withhold supplies, apart from the question of price-cutting. I should have thought that would satisfy anybody. It ought to be made plain that when a man refuses supplies he has got to have good grounds for so refusing—good grounds to him.
The whole purpose of the Bill is to cater for the independent, idiosyncratic will of the supplier. There is no reason why a man should be forced to supply people whom he does not like except those in special occupations, such as a licensee or somebody who holds a public authority licence of some kind. An example has been given of the man who does not like to supply Jews. A man may not like Roman Catholics or members of the Conservative Central Office. Why should a man be compelled to supply such people? The prevalance of nervous breakdowns and ulcers of the stomach will double and treble if we force suppliers to supply people whom they detest on grounds other than price-cutting.

Mr. Cole: I am sure the hon. Member realises that we are talking about other grounds in addition to the prohibited grounds in the earlier part of the Clause. Surely he is not taking these in isolation.

Mr. Lever: I thought I had made it plain that I am aware of that. The purpose of the Amendment is that a man may refuse to deliver supplies if he has reasons which to him are satisfactory, and if he satisfies the Court that his reasons are good and sound—not good in the abstract sense, but good and sound to him—and that he shall then be entitled to withhold supplies. I say "Quite right, too". It would be an odd circumstance if one of my hon. Friends, a passionate member of the Labour Party, were forced to be in regular contact with a member of the Conservative Party who insisted on getting his newspapers from a particular shop. I am sure that if I were in Dr. Dering's neighbourhood he would not like to supply me, and, goodness knows, I would not like to supply him. Why should I be compelled to supply him? If an ex-Nazi comes along and wants supplies from me, am I obliged to trade with him? I may satisfy the Court that


I have strong and passionate grounds for refusing to trade with him.
May I now say a word on a matter which has troubled some of my hon. Friends and, indeed, some hon. Members opposite. That is the question of paramountcy. It becomes a highly academic question. It is as if the law said that a man must not refuse the marriage proposal of a lady on the ground that she was overweight. Suppose that a 20-stone lady made a marriage proposal to me. Suppose that she was also 68 years of age, squinted and had a limp. I would say, if there were an Amendment such as this, that there were other grounds which seemed to me to be good for refusing to accept the matrimonial offer of the lady in question. The question as to which was the paramount motive becomes irrelevant. A similar situation is bound to arise in relation to matters of this kind should they come before the Court.
My final word is to emphasise yet again that the danger here is that, even after the Clause is improved in this way, suppliers will be blackmailed because, although their legal rights would be sufficient to protect them if they went to the Court, they will be afraid to go to the Court because of the so to speak, iniquitous presumption of guilt against them which is raised by the terms of the Bill.

Mr. Paget: One of the problems raised by the Clause is the difficulty imposed upon the unfortunate judge who has to try a case. He has to decide not the reason for refusal in the existing circumstances but what might have been a reason for refusal in circumstances which have not happened. The test is purely subjective—
if…he"—
that is, the supplier—
has other grounds which, standing alone"—
of course, they do not stand alone, because the man is a price cutter—
would have led him to withhold those supplies".
How can any judge decide that question? My right hon. Friend the Member for Battersea, North (Mr. Jay) said that a price-cutter was not a dishonourable man, that a man was not dishonourable merely because he reduced prices.

Nobody will dispute that. A man is dishonourable only if he reduces prices when he has promised not to, in the same way as a man is dishonourable if he does not pay his debts. Both are unenforceable contracts, but both involve breaking one's word.
If the ground is that the supplier does not care to deal with people who do not keep their word, is that an "other ground" which, standing alone, would lead him to refuse supplies? It is true that his failure to keep his word was evidenced by the fact that he cut prices when he had agreed not to. Is that an "other ground" or is it not? It is a reason additional to the cutting of prices which might have occurred without any agreement not to. I do not know. Is it intended that it should be so or not? I think that it is a reason which would apply in the mind of a good many people; it would certainly apply in mine.
Moreover, it is quite clear, as my hon. Friend the Member for Cheetham (Mr. H. Lever) pointed out, somewhat to the suprise of several hon. Members opposite, that the goodness of the reason has nothing to do with the case at all. It does not matter how bad the reason is so long as it is a reason which the supplier would have acted upon in any event. In my view, this is a provision which, apart from other considerations, is wholly unworkable.

Mr. du Cann: May I, by leave of the House, endeavour to reply to the questions which have been put to me, notably by the right hon. Member for Battersea, North (Mr. Jay) and my hon. Friends the Members for Crosby (Mr. Graham Page) and for Stratford-on-Avon (Mr. Maude)?
I take, first, the point about drafting raised by the right hon. Member for Battersea, North. In our opinion, the words "on any such ground" are right in this particular Amendment because there are several grounds comprised within Clause 2(1). On the other hand, I should not suggest for a moment that Government drafting is so impeccable that it can never be improved. The fact that we have already accepted Amendments will, I hope, indicate our view on this matter. Certainly I am ready to look at it. My first opinion is that the drafting is perfectly in order.
9.45 p.m.
The hon. Member for Wednesbury (Mr. Stonehouse) seemed to take the view that the Amendment was so strong that it made Clause 2 absolutely worthless. On the other hand, the hon. Member for Sheffield, Brightside (Mr. Winterbottom) took an entirely different view. He thought that the Amendment was absolutely nebulous. Both hon. Members cannot be right. I thought that my hon. Friend the Member for Crosby was entirely right when he said, by inference, that there was no weakening in the principle of the Bill. During the Committee stage we had substantial discussions of these matters. It was suggested, not least by my hon. Friends, particularly by my hon. Friend the Member for Crosby, that there were good practical reasons why we should consider an Amendment of this sort. My right hon. Friend the Secretary of State accepted that view, hence the Amendment. I repeat that there is no weakening of the Bill. In our opinion, this is a right and practical thing to do.
The hon. Member for Manchester, Cheetham (Mr. H. Lever) took the view that this Amendment was an improvement on the Bill. I am content to rest myself on his honourable and learned opinion.
I hope that some of the things said during the debate will act as a reassurance to my hon. Friend the Member for Stratford-on-Avon. He was principally concerned about blackmail. I do not think that is a real possibility in any sense, although naturally we shall give full weight to the opinions which he expressed.
The basic question has revolved round the subject of paramountcy raised by the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) and the right hon. Member for Battersea, North, and by some of my hon. Friends, particularly my hon. Friend the Member for Bedfordshire, South (Mr. Cole) in an intervention. I think that the answer to the point comes from posing a very simple question. The question which should be decided is this: would the supplier have withheld the goods if the dealer had not been selling below the recommended price? It is as simple

and clear as that. I am glad to see that I carry the hon. and learned Member for Cheetham with me.

Mr. H. Lever: I am not "learned".

Mr. du Cann: I apologise to the hon. Member and to the House. I may have got it wrong technically. I do not believe that I have it wrong as a matter of fact, particularly since, if I may modestly say so, the honourable if not learned Gentleman agrees with me.
My hon. Friend the Member for Crosby was right when he said that the Court must be satisfied if the matter was challenged. On the basis of that question there is no real difficulty.

Mr. A. J. Irvine: Would the hon. Gentleman explain this to me? No doubt he can do so in a sentence, but I have difficulty on the point. If there is a series of motives, why is it necessary, in order to test the paramountcy of a particular motive in the series, to stand that particular motive alone?

Mr. du Cann: It is necessary to divorce it from the point of price cutting. That is our opinion, and we think that we have the wording right. I am ready to consider alternative wording at any stage, because obviously we want to make a success of this item. I said that it was a practical matter. We wanted to meet hon. Members' wishes, which is what we have endeavoured to do. At the moment we are discussing this wording and not alternative wording.
My hon. Friend the Member for Crosby asked whether insolvency could be considered a ground for withholding supplies. Certainly it may, however that insolvency is caused.
To sum up, the Amendment, as I endeavoured to explain when I introduced it, should make it clear that, where there are reasons other than price cutting which, standing alone, would have led a supplier to withhold supplies, the withholding will not be unlawful. The hon. and learned Member for Northampton (Mr. Paget) and some other hon. Members opposite suggested that this would be a point of real difficulty for the Court. As my hon. Friend the Member for Crosby said, there can be a wide variety of perfectly legitimate business reasons why one man does not want to trade with another. I am certain


that those difficulties are largely imaginary. For these reasons, I reject the suggestion of difficulty inherent in the Amendment. We think that the new subsection is right, we have endeavoured to meet the wishes of the House and I hope that it will receive, finally and now, the general approval of the House.

Amendment agreed to.

Mr. Jay: I beg to move Amendment No. 15, in page 3, line 20, at the end, to insert:
(4) Nothing in this section shall make it unlawful for a supplier to withhold goods from any dealer to whom he has not previously sold goods or who refuses or fails to comply with a requirement by the supplier that he shall pay cash or the equivalent of cash on order.
The Amendment deals with two points: first, the withholding of supplies from dealers with whom the manufacturer has never previously traded, and, secondly, the condition that cash or its equivalent shall be paid for the goods. The latter question of cash and credit arises under a later Amendment No. 20, which is to be moved by the Government. I therefore confine myself to arguing the case of the supplier who is to be compelled to sell goods to somebody with whom he has never dealt.
As I said earlier, most of the difficulties of the Bill, particularly this part of it, arise from the attempt to induce people to trade with those with whom they do not wish to trade. I cannot go quite as far as my hon. Friend the Member for Wednesbury (Mr. Stone-house), who merely argues quite simply that unless we have some provision about the withholding of supplies the whole Bill will be null and void. That argument constitutes a case for preventing the withholding of supplies in some circumstances, but it need not carry us to the extreme length with which we are now confronted in the Bill.
Nor is it wholly convincing to say that any supplier can defeat the purpose of the Bill by withholding supplies. My hon. Friend argued that that was easy in every case. We have to remember as the background of this discussion that the collective boycott is now illegal in any event. Therefore, if one manufacturer withholds supplies from a retailer, the retailer may get supplies from another manufacturer. It is impossible to say in a given case quite how the

economics will work out. That is not, therefore, a sufficient answer to the argument.
We have reached the point—I say this to show how modest and moderate our Amendment is—when it is accepted that the Bill will compel a number of traders to sell goods to those to whom they do not wish to sell. We have also accepted that if the supplier is not to do that, the onus of proof is upon him to make his case in court that his motives were such and such. We have also accepted that he must prove what his motives were. In view of our decision on the last Amendment, we have accepted that he has also to prove what his motives might have been. That seems to be going quite far enough.
It is just possible that one could justify the introduction of that degree of compulsion into trade as a sanction for the ultimate purpose of the Bill, but to go beyond that and say that the supplier is to be compelled, on pain of all these legal proceedings, to supply somebody whom he does not wish to supply, and somebody with whom he has never done business before, is to carry the Bill to extremes.
I ask the Government to consider whether it would not introduce a little reason, moderation and common sense into this Measure if we were to stop at this point and say that all these provisions would not apply where the dealer who demanded supplies was somebody with whom the manufacturer had not done business before. The Minister, or someone on the Government side, said earlier that it would be wrong to discourage new entrants into the trade. It was the hon. Member for Stratford-on-Avon (Mr. Maude). Of course it would; but, of course, if the Government accepted this Amendment it would be perfectly open to the manufacturer to deal with new retailers if he wished to do so. There would be a free choice on either side. All it will say is that he will not be compelled to supply those people against his will in the circumstances laid down in the Bill.
It really does seem to me to be going to extreme lengths to introduce compulsion of this order. When we have debated the location of industry we have sometimes talked of direction, and a lot of nonsense h as been talked about direc-


tion. It is sometimes suggested that we can compel people to put factories where they do not want to. We on this side of the House have often pointed out that one cannot by law compel a man to build a factory where he does not wish to. What one can compel him to do is not to build one where one does not want him to. That is perfectly possible, and it may be a wise thing to do. A lot of things said about direction, including a remark by the Prime Minister at Question Time last week, are really no more than nonsense.
What the Minister here is doing is to introduce a real measure of direction into trade, if he says that somebody has to start trading with a retailer with whom he has never traded before, on pain of legal action. This is carrying the process to a really extreme point, and I would suggest to the Minister that, having accepted all those other provisions, which may perhaps be necessary, it really would be wise to stop at this point and to accept the very modest limitation contained in this Amendment.

Mr. Maude: I shall try not to repeat what I said on the last Amendment. I rise to say one thing quite briefly. I still believe that the right hon. Gentleman the Member for Battersea, North (Mr. Jay) is going too far with this Amendment. Nevertheless, I still believe that he is on to a good point. I think also that my hon. Friend the Minister of State did not really go quite far enough in his reply to the last Amendment to allay the fears of those who believe that it is possible for a supplier to be placed in a position of jeopardy and great expense in being required to supply goods to somebody with whom he has never supplied them before and to whom he does not want to supply them now. If it would be possible in another place to produce a compromise Amendment which would go some way towards meeting this I think we should all be perfectly satisfied.
I would be perfectly happy if my hon. Friend could convince me, for example, that the fact that the supplier has never supplied a retailer before would in itself be a ground which, standing alone, would be held to justify him in not supplying him now. This seems to me might very well be so. If this is so, and

it is covered by the Amendment which the House has just passed, I think that our fears will be set at rest; but we should like a real reassurance.
My hon. Friend said he did not think there was any justification for a belief that suppliers could be blackmailed. [Interruption.] Perhaps "blackmail" is an extreme word. They might, nevertheless, be put to considerable inconvenience and expense by being threatened with proceedings by retailers whom they had never supplied before, and they might find themselves in a position where it would be, let us say, cheaper, less troublesome, however unpleasant, to deal with people with whom they did not want to deal and had not dealt before.
Clauses 2 and 4 taken in conjunction have aroused quite considerable fears in this respect among a number of suppliers. I would be most grateful if my hon. Friend could tell us whether the fact that a manufacturer has never before dealt with the retailer would give the supplier reason for hope that under the Amendment we have just passed that would be a ground to enable him not to do so.

It being Ten o'clock, the debate stood adjourned.

Ordered,
That the Proceedings on Government Business may be entered upon and proceeded with at this day's Sitting at any hour, though opposed. —[Mr. Redmayne]

Question again proposed, That the proposed words be there inserted in the Bill.

Mr. H. Lever: I shall not detain the House for more than a moment in expressing one point. This is an Amendment which can be accepted by those who believe in the purposes of the Bill and those who are opposed to it.
It is a fallacy to suppose that the abolition of price maintenance depends on compelling people to go through this utterly repugnant experience of trading with people with whom they do not want to trade. Price maintenance in the past has only precariously proved maintainable when we have been able to enforce fully at law a whole array of penalties against people who broke the rule of price maintenance. Far from it being the case that one needs


to enforce deliveries of supplies, the position is that once one makes it illegal collectively to enforce price maintenance, one does not need these provisions at all. Therefore, this reasonable and entirely desirable Amendment ought to be accepted by the Government.

Mr. Cole: What the hon. Member for Manchester, Cheetham (Mr. H. Lever) has said is not the whole story. Unless one blocks up the ways out, one cannot insist on the maintenance of the abolition of resale price maintenance.
With regard to what my hon. Friend the Member for Stratford-on-Avon (Mr. Maude) said, I do not think that my hon. Friend the Minister of State can answer his question. It is a matter for the Court to decide whether the fact that there is a new dealer and there is reluctance to supply him is a good enough reason standing alone.
I support the Amendment. As the right hon. Member for Battersea, North (Mr. Jay) said, one part is already covered in Amendment No. 20, and I think that the first part of it ought to be in the Bill specifically. No hon. Member, not even my right hon. Friend, can decide the question under the first part of the Amendment. I can imagine that a man might not want any more outlets for his business, and, therefore, being fully occupied in the area, might not want to supply a certain dealer. That defence might not stand up before the Court under Amendment No. 14. I do not know of any way whereby we can prejudge the decision of the Court in that respect. The Amendment should be accepted so that the Court might know beyond equivocation what we mean in this respect. We need the Amendment.

Mr. du Cann: As the right hon. Member for Battersea, North (Mr. Jay) said, the Amendment is in two parts. There is the cash part, to which he made very short reference. He and my hon. Friend the Member for Bedfordshire, South (Mr. Cole) have acknowledged that the Government have endeavoured to deal with the matter in a later Amendment which we shall discuss shortly, Amendment No. 20. That might be described as the terms of payment Amendment. It is a matter about which we had substantial discussion in Committee.
As there has been no discussion on the cash point, and as the right hon. Gentleman and my hon. Friend have acknowledged by inference that they appreciate that the Amendment exists, perhaps I need not spend time talking about that part of the Amendment but shall be better advised to go straight on to the other matter, regarding which substantial discussion has occurred, not least in the intervention by my hon. Friend the Member for Stratford-on-Avon (Mr. Maude). I am sorry that my hon. Friend the Member for Stratford-on-Avon felt that, because I was endeavouring to get on a little I did not do the points which he raised on the last Amendment sufficient justice.
It would be appropriate, I think, if I said at once and plainly that the second purpose of the Amendment is quite unacceptable to the Government for reasons which I shall describe Some of them were very clearly advanced by my hon. Friend the Member for Stratford-on-Avon when we were discussing the last Amendment. I appreciate that he understands that they remain. He did not want to take up the time of the House by rehearsing them.
The effect of this part of the Amendment would be that in no circumstances could it be unlawful for a supplier to withhold supplies from a dealer with whom he had not previously done business. We had some discussion about this in Committee. Our view is that there is no reason for weakening Clause 2 in this way. The present position, in the light of the Amendment which the House has just accepted, is that the supplier is free to decide with whom he will do business, except where his only motive in refusing to sell is that the dealer concerned is selling below the recommended price.
As my hon. Friend the Member for Stratford-on-Avon stated plainly, we frankly do not think that it would be in the best interests of the economy to put difficulties in the way of newly established dealers. That is the answer to the point made by my hon. Friend the Member for Bedfordshire, South. If suppliers can effectively prevent enterprising newcomers from getting supplies, the flexibility which we want will not be introduced into the distributive system.
This is one of the objects of the Bill. For that reason, particularly, we find the Amendment totally unacceptable.

Mr. Jay: It would not prevent new retailers from getting supplies. Any manufacturer would be free to supply them if they wished.

Mr. du Cann: With great respect, the right hon. Gentleman seems to be a little naive. I can see a new form of retailing completely killed by suppliers who are determined to kill it. We think that the Amendment goes much too far.
My hon. Friend the Member for Stratford-on-Avon asked me a question about the previous Amendment which is relevant to the consideration which we are giving to this Amendment. He questioned whether a supplier who had never before dealt with a particular retailer could be let out under Amendment No. 14. As my hon. Friend the Member for Bedfordshire, South said, this is not a question upon which I can give a straight "Yes" or "No" answer. On the other hand, I can give my hon. Friend some guidance, and I shall be pleased to do so.
I can imagine cases in which, within the context of the discussions which we had on Amendment No. 14, which is very plain on the subject of paramountcy, the supplier could well say that in a particular town, for instance, he already had all the retail outlets which he wanted or which he could supply or which he could afford to supply, and that he therefore found himself in a position in which, for legitimate business reasons, a phrase used by my hon. Friend the Member for Crosby (Mr. Graham Page), he did not wish to supply; and in those circumstances he would be free not to supply. I gave one example and I could think of a substantial number of similar cases. I hope that my hon. Friend the Member for Stratford-on-Avon feels that even though I cannot be as clear as he wishes and cannot give him an exhaustive catalogue, I can think of many cases in which that would apply.
On the question of commercial blackmail to which my hon. Friend referred, and on which I answered him in relation to the previous Amendment as best I could with a clear statement under advice, perhaps I should say a further

word. It is our opinion that if a completely unfounded case were brought against a supplier who has not previously supplied a dealer and did not want to supply him for some reason unconnected with price-cutting, it should be comparatively much easier for him to establish this than in a case in which the dealer is an old case. I think that the position is entirely clear.
We have dealt with the payment-of-cash part of the Amendment. As for the remainder of it, we are entirely satisfied that if we pass the Amendment it would dangerously weaken the Bill. I am sorry to be as plain as that with the right hon. Gentleman. I prefer to agree with him rather than disagree with him, but when I disagree with him I say so plainly. We think that the Amendment would dangerously weaken the Bill, and I must advise the House to reject it.

Mr. Stonehouse: The Minister of State has deployed some powerful arguments against the Amendment and I find myself in substantial agreement with him. If the Amendment were accepted, it would undermine the strength of Clause 2 and would make it very difficult for new forms of efficient retailing to develop.
I will give an example. If a discount house organisation sets up a completely new organisation and is able, through economies on overhead expenditure, to be able to pass on all the benefits of substantially lower prices to customers who choose to go some way to the discount house and help themselves, it would be possible for suppliers, if the Amendment went through, to deny that organisation supplies of their commodities. That would be a substantial discouragement to the development of new forms of retailing, which are bound to be in the interests of consumers generally if they have the advantage of lower prices through higher efficiency passed on to them.
I find myself in agreement with the second part of the Amendment, but as this is dealt with by Amendment No. 20, it can be left until then. In view of my feelings on this Amendment, I will have to advise my right hon. Friends that I will have to abstain if the Amendment is forced to a Division.

Question put, That the proposed words be there inserted in the Bill:—

The House divided: Ayes 133, Noes 202.

Division No. 92.
AYES
10.12 p.m.


Ainsley, William
Harper, Joseph
Probert, Arthur


Allen, Scholefield (Crewe)
Hayman, F. H.
Pursey, Cmdr. Harry


Awbery, Stan (Bristol, Central)
Holman, Percy
Rankin, John


Barnett, Guy
Houghton, Juglas
Redhead, E. C.


Beaney, Alan
Howell, Denis (Small Heath)
Rees, Merlyn (Leeds, S.)


Blackburn, F.
Hewle, W.
Rhodes, H.


Blyton, William
Hoy, James H.
Roberts, Albert (Normanton)


Bowden, Rt. Hn. H. W. (Leics, S. W.)
Hughes, Cledwyn (Anglesey)
Robertson, John (Paisley)


Boyden, James
Hughes, Hector (Aberdeen, N.)
Rodgers, W. T. (Stockton)


Braddock, Mrs. E. M.
Hunter, A. E.
Short, Edward


Bradley, Tom
Hynd, H. (Accrington)
Silkin, John


Broughton, Dr. A. D. D.
Hynd, John (Attercliffe)
Silverman, Julius (Aston)


Butler, Herbert (Hackney, C.)
Irvine, A. J. (Edge Hill)
Skettington, Arthur


Carmichael, Neil
Irving, Sydney (Dartford)
Slater, Mrs. Harriet (Stoke, N.)


Collick, Percy
Janner, Sir Barnett
Slater, Joseph (Sedgefield)


Craddock, George (Bradford, S.)
Jay, Rt. Hon. Douglas
Small, William


Cronin, John
Jones, Elwyn (West Ham, S.)
Smith, Ellis (Stoke, S.)


Crossman, R. H. S.
Jones, J. Idwal (Wrexham)
Sorensen, R. W.


Cullen, Mrs. Alice
Jones, T. W. (Merioneth)
Spriggs, Leslie


Dalyell, Tam
Kenyon, Clifford
Stewart, Michael (Fulham)


Darling, George
Lawson, George
Stones, William


Davies, G. Elfed (Rhondda, E.)
Lee, Frederick (Newton)
Swain, Tnomas


Davies, Ifor (Gower)
McBride, N.
Swingler, Stephen


Dempsey, James
McCann, J.
Symonds, J. B.


Diamond, John
MacColl, James
Taylor, Bernard (Mansfield)


Dodds, Norman
MacDermot, Niall
Thomas, lorwerth (Rhondda, W.)


Duffy, A. E. P. (Colne Valley)
McInnes, James
Thompson, Dr. Alan (Dunfermline)


Edwards, Rt. Hon. Ness (Caerphilly)
MacPherson, Malcolm
Thomson, G. M. (Dundee, E.)


Edwards, Robert (Bilston)
Mallaieu, E. L. (Brigg)
Wainwright, Edwin


Edwards, Walter (Stepney)
Mapp, Charles
Watkins, Tudor


Evans, Albert
Mayhew, Christopher
Weitzman, David


Fernyhough, E.
Mellish, R. J.
Wells, William (Walsall, N.)


Finch, Harold
Mitchison, G. R.
White, Mrs. Eirene


Fitch, Alan
Neal, Harold
Wilkins, W. A.


Fletcher, Eric
Noel-Baker, Rt. Hn. Philip (Derby, S.)
Willey, Frederick


Foley, Maurice
Oram, A. E.
Willis, E. G. (Edinburgh, E.)


Foot, Michael (Ebbw Vale)
Owen, Will
Winterbottom, R. E.


Fraser, Thomas (Hamilton)
Padley, W. E.
Woodburn, Rt. Hon. A.


Galpern, Sir Myer
Paget, R. T.
Woot, Robert


George, Lady Megan Lloyd (Carmthn)
Pargiter, G. A.
Wyatt, Woodrow


Ginsburg, David
Pavitt, Laurence
Yates, Victor (Ladywood)


Gordon Walker, Rt. Hon. P. C.
Pearson, Arthur (Pontypridd)



Gourlay, Harry
Peart, Frederick
TELLERS FOR THE AYES:


Griffiths, David (Rother Valley)
Pentland, Norman
Mr. Charley A.


Hale, Leslie (Oldham, W.)
Popplewell, Ernest
Mr. Grey.


Hannan, William
Price, J. T. (Westhoughton)





NOES


Agnew, Sir Peter
Chichester-Clark, R.
Gibson-Watt, David


Anderson, D. C.
Clark, Henry (Antrim, N.)
Gilmour, Ian (Norfolk, Central)


Atkins, Humphrey
Clark, William (Nottingham, S.)
Gilmour, Sir John (East Fife)


Awdry, Daniel (Chippenham)
Cleaver, Leonard
Glover, Sir Douglas


Barlow, Sir John
Cooke, Robert
Glyn, Dr. Alan (Clapham)


Barter, John
Cordeaux, Lt.-Col. J. K.
Glyn, Sir Richard (Dorset, N.)


Batsford, Brian
Garfield, F. V.
Gough, Frederick


Bell, Ronald
Costain, A. P.
Gower, Raymond


Bennett, F. M. (Torquay)
Coulson, Michael
Grant-Ferris, R.


Bennett, Dr. Reginald (Gos &amp; Fhm)
Craddock, Sir Berestord (Speithorne)
Green, Alan


Biffen, John
Crawley, Aidan
Gresham Cooke, R.


Bingham, R. M.
Dalkeith, Earl of
Grosvenor, Lord Robert


Birch, Rt. Hon. Nigel
Dance, James
Gurden, Harold


Bishop, Sir Patrick
Deedes, Rt. Hon. W. F.
Hamilton, Michael (Wellingborough)


Black, Sir Cyril
Digby, Simon Wingfield
Harris, Frederic (Croydon, N.W.)


Bossom, Hon. Clive
Donaldson, Cmdr. C. E. M.
Harris, Reader (Heston)


Bourne-Arton, A.
Doughty, Charles
Harrison, Col. Sir Harwood (Eye)


Bowen, Roderic (Cardigan)
Douglas-Home, Rt. Hon. Sir Alen
Harvey, John (Walthamstow, E.)


Box, Donald
du Cann, Edward
Harvie Anderson, Miss


Boyd-Carpenter, Rt. Hon. John
Eden, Sir John
Hastings, Stephen


Braine, Bernard
Elliot, Capt Walter (Carshalton)
Heath, Rt. Hon. Edward


Brewis, John
Elliott, R. W. (Newc'tle-upon-Tyne, N.)
Henderson, John (Cathcart)


Brown, Alan (Tottenham)
Emery, Peter
Hendry, Forbes


Browne, Percy (Torrington)
Errington, Sir Eric
Hiley, Joseph


Bryan, Paul
Farr, John
Hill, Mrs. Eveline (Wythenshawe)


Buck, Antony
Fell, Anthony
Hill, J. E. B. (S. Norfolk)


Bullus, Wing Commander Eric
Finlay, Graeme
Hobson, Rt. Hon. Sir John


Campbell, Gordon
Fisher, Nigel
Hooking, Philip N.


Chataway, Christopher
Fletcher-Cooke, Charles
Holland, Philip




Holt, Arthur
Mawby, Ray
Smith, Dudley (Br'ntf'd &amp; Chiswick)


Hooson, H. E.
Maydon, Lt.-Cmdr. S. L. C.
Spearman, Sir Alexander


Hornsby-Smith, Rt. Hon. Dame P.
Mills, Stratton
Speir, Rupert


Hughes Hallett, Vice-Admiral John
Miscampbell, Norman
Stainton, Keith


Hughes-Young, Michael
More, Jasper (Ludlow)
Stanley, Hon. Richard


Hulbert, Sir Norman
Morgan, William
Stoddart-Scott, Col. Sir Malcolm


Hurd, Sir Anthony
Neave, Airey
Storey, Sir Samuel


Jackson, John
Noble, Rt. Hon. Michael
Studholme, Sir Henry


Johnson, Eric (Blackley)
Orr, Capt. L. P. S.
Summers, Sir Spencer


Jones, Arthur (Northants, S.)
Orr-Ewing, Sir Ian (Hendon, North)
Tapsell, Peter


Kaberry, Sir Donald
Osborn, John (Hallam)
Taylor, Edwin (Bolton, E.)


Kerans, Cdr. J. S.
Page, John (Harrow, West)
Taylor, Frank (M'ch'st'r, Moss Side)


Kerr, Sir Hamilton
Page, Graham (Crosby)
Temple, John M.


Kershaw, Anthony
Pannell, Norman (Kirkdale)
Thomas, Sir Leslie (Canterbury)


Kimball, Marcus
Partridge, E.
Thompson, Sir Richard (Croydon, S.)


Kirk, Peter
Pearson, Frank (Clitheroe)
Tiley, Arthur (Bradford, W.)


Kitson, Timothy
Pickthorm, Sir Kenneth
Tilney, John (Wavertree)


Lambton, Viscount
Pitt, Dame Edith
Touche, Rt. Hon. Sir Gordon


Langford-Holt, Sir John
Pounder, Rafton
Turner, Colin


Leavey, J. A.
Pace, David (Eastleigh)
van Strauhenzee, W. R.


Lewis, Kenneth (Rutland)
Prior, J. M. L.
Vaughan-Morgan, Rt. Hon. Sir John


Lilley, F. J. P.
Prior-Palmer, Brig, Sir Otho
Wade, Donald


Lindsay, Sir Martin
Proudfoot, Wilfred
Walder, David


Linstead, Sir Hugh
Quennell, Miss J. M.
Ward, Dame Irene


Litchfield, Capt. John
Ramsden, Rt. Hon. James
Webster, David


Lloyd, Rt. Hon. Selwyn (Wirral)
Rawlinson, Rt. Hon. Sir Peter
Wells, John (Maidstone)


Longbottom, Charles
Redmayne, Rt. Hon. Martin
Whitelaw, William


Longden, Gilbert
Rees, Hugh (Swansea, W.)
Williams, Dudley (Exeter)


Loveys, Walter H.
Rees-Davies, W. R. (Isle of Thanet)
Williams, Paul (Sunderland, S.)


Lucas, Sir Jocelyn
Renton, Rt. Hon. David
Wills, Sir Gerald (Bridgwater)


Lucas-Tooth, Sir Hugh
Ridley, Hon. Nicholas
Wilson, Geoffrey (Truro)


McAddan, Sir Stephen
Ridsdale, Julian
Wise, A. R.


MacArthur, Ian
Robson Brown, Sir William
Wotrige-Gordon, Patrick


McLaren, Martin
Roots, William
Woodnutt, Mark


Maclay, Rt. Hon. John
Ropner, Col. Sir Leonard
Worsley, Marcus


McMaster, Stanley R.
Royle, Anthony (Richmond, Surrey)



Maitland, Sir John
Scott-Hopkins, James
TELLERS FOR THE NOES:


Marten, Neil
Seymour, Leslie
Mr. Peel and Mr. Pym.


Mathew, Robert (Honiton)
Sharples, Richard



Maude, Angus (Stratford-on-Avon)
Shaw, M.

Clause 3.—(EXCEPTION FOR MEASURES AGAINST LOSS LEADERS.)

Mr. Jay: I beg to move Amendment No. 17, in page 4, line 5, at the end to insert:
For the purposes of this section goods shall be deemed to be used as loss leaders where they are sold by a dealer at a price less than the cost at which they were supplied to him plus two per cent. if he is a wholesaler or five per cent. if he is a dealer other than a wholesaler.
The Amendment relates to the definition of what, for the purposes of the Bill, is referred to as a loss leader. In our view it would help in the laudable aim of simplifying the procedure and making it easier for the Court and the judges concerned to reach the decision that they are required to reach.
When the Bill was first introduced the Minister defined a loss leader as the sale of goods at or below the cost of purchase by the retailer or the supplier. It was pointed out to him that that was really a quite inadequate definition, because a retailer might sell slightly above the cost at which he had bought the goods but nevertheless make considerable losses. The right hon. Gentleman therefore substantially amended the Bill in Commit-

tee and inserted as a definition of a loss leader, a reference to the motive of the retailer. Subsection (2) now reads:
The reference in this section to the use of goods as loss leaders is a reference to a resale of the goods effected by the dealer, not for the purpose of making a profit on the sale of those goods, but for the purpose of attracting to the establishment at which the goods are sold customers likely to purchase other goods or otherwise for the purpose of advertising the business of the dealer
If the Amendment were accepted the right hon. Gentleman's subsection would remain but, in addition, there would be a simple arithmetical test which could be applied at least in some cases, thereby making the whole argument less vague and ambiguous, and shortening it. We suggest that where the goods were sold at not more than 5 per cent. above the cost in the case of a retailer and 2 per cent. in the case of a wholesaler it should be presumed without further argument that the goods were being used as a loss leader. It would not be necessary in that case to argue what were the motives of the retailer, or what they might have been.
I would have thought that the Amendment, put forward in addition to the


right hon. Gentleman's criterion and not instead of it—leaving the main criterion of motive—would short-circuit a great deal of argument where it was possible to do so. I should have thought it an improvement. I cannot see what good reason there is for not having this simple solution of the problem where it is practicable and retaining the right hon. Gentleman's motive for other cases where this arithmetical test would not apply. I hope the right hon. Gentleman may accept the help that we are offering him in order to improve the Bill.

Mr. Heath: The Amendment proposed by the right hon. Member for Battersea, North (Mr. Jay) of a loss leader is a recasting from the Amendment which he moved during the Committee stage discussions as an Amendment to my Amendment which recast this is the form of what is known as the Canadian approach. On that occasion it was rejected by the Committee, but we did discuss the possibility of having two criteria concerned with this point. As the right hon. Gentleman rightly said, the recasting of this Clause during the Committee stage discussions has established as a test of motive that loss leader selling has taken place if the dealer has sold not in order to make a profit but for advertising or to attract customers.
One of the grounds which I put before the Committee as being one on which we abandoned the original approach for this approach was in order to give greater flexibility and avoid some of the difficulties which the rigid approach was bound to create. The right hon. Gentleman is still suggesting that we should try to combine the two approaches in one context. There is a particular difference in the recasting of this Amendment. The original Amendment, as moved during the Committee stage discussions, would have had the effect that it would have been presumed that loss leader selling had taken place in any case where a dealer sold goods at a price below the price quoted or a fixed price to which a certain percentage had been added. It was 2 per cent. in the case of a wholesaler or 5 per cent. for dealers other than wholesalers.
In the original form this presumption would have been capable of rebuttal. As recast in the present Amendment it goes further and says that such a sale must in all circumstances be regarded by the court as a loss leader sale; so that in a way it has become even more rigid than in the original form of the Amendment to which I took exception when it was put forward in the new context and rephrasing of the Clause as a whole. So I do not think that it would be possible for me to advise the House to accept this as an addition to the criteria for loss leadering.
The definition originally in the Bill was a definition on cost. This is one which adds an arbitrary margin to the definition solely in terms of the price actually paid. There are, of course, difficulties about this. No margin is applicable to all trades and all dealers. It has to be an arbitrary margin if the right hon. Gentleman is proposing to add one. Secondly, any definition of this kind cuts particularly harshly in respect of small traders who do not benefit from the most favourable buying terms, because in their case the mark-up percentage is added to the higher price and therefore the difference between them and the larger dealer with a larger discount becomes even greater. This was one of the fundamental reasons why we felt that the original Clause in the Bill had a great weakness.

Mr. Jay: If that criterion were put in in addition to the criterion of the right hon. Gentleman, surely that would add a little too much.

Mr. Heath: With respect, I do not think that is the case, particularly in the form it is recast in which it is bound to be taken as a criterion of loss leadering and is not open to rebuttal at all. It removes the element of flexibility that we have been able to bring into the Clause as recast and approved during the Committee proceedings. I therefore suggest that we should still rely on Clause 3 as it is recast, and should not try to combine the two forms of criteria of loss leadering—the form in the Bill now and the one we had originally. I advise the House not to accept the Amendment.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 118, Noes 183.

Division No. 93
AYES
[10.30 p.m.


Ainsley, William
Hannan, William
Redhead, E. C.


Allen, Scholefield (Crewe)
Harper, Joseph
Rees, Merlyn (Leeds, S.)


Barnett, Guy
Hayman, F. H.
Roberts, Albert (Normanton)


Beaney, Alan
Holman, Percy
Robertson, John (Paisley)


Blackburn, F.
Holt, Arthur
Rodgers, W. T. (Stockton)


Blyton, William
Hooson, H. E.
Short, Edward


Bowden, Rt. Hn. H. W. (Leics, S. W.)
Houghton, Douglas
Silkin, John


Bowen, Roderic (Cardigan)
Howell, Denis (Small Heath)
Silverman, Julius (Aston)


Braddock, Mrs. E. M.
Howie, W.
Skeffington, Arthur


Bradley, Tom
Hoy, James H.
Slater, Mrs. Harriet (Stoke, N.)


Broughton, Dr. A. D. D.
Hughes, Cledwyn (Anglesey)
Slater, Joseph (Sedgefield)


Butler, Herbert (Hackney, C.)
Hughes, Hector (Aberdeen, N.)
Small, William


Carmichael, Nell
Hynd, John (Attercliffe)
Smith, Ellis (Stoke, S.)


Craddock, George (Bradford, S.)
Irvine, A. J. (Edge Hill)
Sorensen, R. W.


Crossman, R. H. S.
Irving, Sydney (Dartford)
Spriggs, Leslie


Cullen, Mrs. Alice
Janner, Sir Barnett
Stewart, Michael (Fulham)


Dalyell, Tam
Jay, Rt. Hon. Douglas
Stonehouse, John


Darling, George
Jones, Elwyn (West Ham, S.)
Stones, William


Davies, G. Elfed (Rhondda, E.)
Jones, J. Idwal (Wrexham)
Swain, Thomas


Davies, Ifor (Gower)
Jones, T. W. (Merioneth)
Swingler, Stephen


Dempsey, James
Kenyon, Clifford
Taylor, Bernard (Mansfield)


Diamond, John
Lawson, George
Thomas, Iorwerth (Rhondda, W.)


Dodds, Norman
McBride, N.
Thompson, Dr. Alan (Dunfermline)


Duffy, A. E. P. (Colne Valley)
MacColl, James
Thomson, G. M. (Dundee, E.)


Edwards, Rt. Hon. Ness (Caerphilly)
MacDermot, Niall
Wainwright, Edwin


Evans, Albert
McInnes, James
Watkins, Tudor


Fernyhough, E.
MacPherson, Malcolm
Weitzman, David


Finch, Harold
Mapp, Charles
Wells, William (Walsall, N.)


Fitch, Alan
Mayhew, Christopher
White, Mrs Eirene


Fletcher, Eric
Mellish, R. J.
Wilkins, W. A.


Foley, Maurice
Mitchison, G. R.
Willey, Frederick


Foot, Michael (Ebbw Vale)
Neal, Harold
Willis, E. G. (Edinburgh, E.)


Fraser, Thomas (Hamilton)
Noel-Baker, Rt. Hn. Philip (Derby, S.)
Wilson, Rt. Hon. Harold (Huyton)


Galpern, Sir Myer
Oram, A. E.
Winterbottom, R. E.


George, Lady Megan Lloyd (Crmrthn)
Owen, Will
Woodburn, Rt. Hon. A.


Ginsburg, David
Padley, W. E.
Woof, Robert


Gordon Walker, Rt. Hon. P. C.
Pavitt, Laurence
Yates, Victor (Ladywood)


Gourlay, Harry
Pentland, Norman



Grey, Charles
Popplewell, Ernest
TELLERS FOR THE AYES:


Griffiths, David (Rother Valley)
Price, J. T. (Westhoughton)
Mr. Charles A. Howell and



Probert, Arthur
Mr. McCann.




NOES


Anderson, D. C.
Dance, James
Heath, Rt. Hon. Edward


Awdry, Daniel (Chippenham)
Deedes, Rt. Hon. W. F.
Henderson, John (Cathcart)


Barlow, Sir John
Donaldson, Cmdr. C. E. M.
Hendry, Forbes


Barter, John
Doughty, Charles
Hiley, Joseph


Bell, Ronald
du Cann, Edward
Hill, Mrs. Eveline (Wythenshawe)


Bennett, F. M. (Torquay)
Eden, Sir John
Hill, J. E. B. (S. Norfolk)


Biffen, John
Elliot, Capt. Walter (Carshalton)
Hobson, Rt. Hon. Sir John


Bingham, R. M.
Elliott, R. W. (Newc'tle-upon-Tyne, N.)
Hocking, Philip N.


Birch, Rt. Hon. Nigel
Emery, Peter
Holland, Philip


Bishop, Sir Patrick
Errington, Sir Eric
Hornsby-Smith, Rt. Hon. Dame P.


Black, Sir Cyril
Fell, Anthony
Hughes Hallett, Vice-Admiral John


Bossom, Hon. Clive
Finlay, Graeme
Hughes-Young, Michael


Bourne-Arton, A.
Fisher, Nigel
Hulbert, Sir Norman


Box, Donald
Fletcher-Cooke, Charles
Hurd, Sir Anthony


Boyd-Carpenter, Rt. Hon. John
Gibson-Watt, David
Jackson, John


Braine, Bernard
Gilmour, Ian (Norfolk, Central)
Johnson, Eric (Blackley)


Brewis, John
Gilmour, Sir John (East Fife)
Jones, Arthur (Northants, S.)


Brown, Alan (Tottenham)
Glover, Sir Douglas
Kaberry, Sir Donald


Bryan, Paul
Glyn, Dr. Alan (Clapham)
Kerans, Cdr. J. S.


Buck, Antony
Glyn, Sir Richard (Dorset, N.)
Kerr, Sir Hamilton


Campbell, Gordon
Gough, Frederick
Kershaw, Anthony


Chataway, Christopher
Gower, Raymond
Kirk, Peter


Chichester-Clark, R.
Grant-Ferris, R.
Kitson, Timothy


Clark, Henry (Antrim, N.)
Green, Alan
Lambton, Viscount


Clark, William (Nottingham, S.)
Gresham Cooke, R.
Langford-Holt, Sir John


Cleaver, Leonard
Grosvenor, Lord Robert
Leavey, J. A.


Cooke, Robert
Gurden, Harold
Lewis, Kenneth (Rutland)


Cordeaux, Lt.-Col. J. K.
Hamilton, Michael (Wellingborough)
Lilley, F. J. P.


Corfield, F. V.
Harris, Reader (Heston)
Linstead, Sir Hugh


Costain, A. P.
Harrison, Col. Sir Harwood (Eye)
Litchfield, Capt. John


Coulson, Michael
Harvey, John (Walthamstow, E.)
Lloyd, Rt. Hon. Selwyn (Wirral)


Crawley, Aldan[...]
Harvie Anderson, Miss
Longbottom, Charles


Dalkeith, Earl of
Hastings, Stephen
Longden, Gilbert




Loveys, Walter H.
Pickthorn, Sir Kenneth
Studholme, Sir Henry


Lucas, Sir Jocelyn
Pitt, Dame Edith
Summers, Sir Spencer


Lucas-Tooth, Sir Hugh
Pounder, Rafton
Tapsell, Peter


McAdden, Sir Stephen
Price, David (Eastleigh)
Taylor, Edwin (Bolton, E.)


MacArthur, Ian
Prior, J. M. L.
Taylor, Frank (M'ch'st'r, Moss Side)


McLaren, Martin
Prior-Palmer, Brig. Sir Guy
Temple, John M.


Maclay, Rt. Hon. John
Proudfoot, Wilfred
Thomas, Sir Leslie (Canterbury)


McMaster, Stanley R.
Quennell, Miss J. M.
Thompson, Sir Richard (Croydon, S.)


Marten, Neil
Ramsden, Rt. Hon. James
Tiley, Arthur (Bradford, W.)


Mathew, Robert (Honiton)
Rawlinson, Rt. Hon. Sir Peter
Tilney, John (Wavertree)


Maude, Angus (Stratford-on-Avon)
Redmayne, Rt. Hon. Martin
Touche, Rt. Hon. Sir Gordon


Maxwell-Hyslop, R. J.
Rees, Hugh (Swansea, W.)
Turner, Colin


Maydon, Lt.-Cmdr. S. L. C.
Rees-Davies, W. R. (Isle of Thanet)
van Straubenzee, W. R.


Mills, Stratton
Renton, Rt. Hon. David
Vaughan-Morgan, Rt. Hon. Sir John


Miscampbell, Norman
Ridley, Hon. Nicholas
Walder, David


More, Jasper (Ludlow)
Ridsdale, Julian
Ward, Dame Irene


Morgan, William
Roots, William
Webster, David


Neave, Alrey
Ropner, Col. Sir Leonard
Wells, John (Maidstone)


Nicholls, Sir Harmar
Scott-Hopkins, James
Whitelaw, William


Noble, Rt. Hon. Michael
Seymour, Leslie
Williams, Dudley (Exeter)


Orr, Capt. L. P. S.
Sharples, Richard
Williams, Paul (Sunderland, S.)


Orr-Ewing, Sir Ian (Hendon, North)
Shaw, M.
Wilson, Geoffrey (Truro)


Osborn, John (Hallam)
Smith, Dudley (Br'ntf'd &amp; Chiswick)
Wise, A. R.


Page, John (Harrow, West)
Spearman, Sir Alexander
Wolrige-Gordon, Patrick


Page, Graham (Crosby)
Speir, Rupert
Woodnutt, Mark


Pannell, Norman (Kirkdale)
Stainton, Keith
Worsley, Marcus


Partridge, E.
Stanley, Hon. Richard



Pearson, Frank (Clitheroe)
Stoddart-Scott, Col. Sir Malcolm
TELLERS FOR THE NOES:


Peel, John
Storey, Sir Samuel
Mr. Batsford and Mr. Pym.

Clause 4.—(CIVIL REMEDIES FOR BREACH OF RESTRICTIONS.)

Mr. Heath: I beg to move Amendment No. 20 in page 4, line 38, at end insert:
Provided that this subsection shall not apply where the proof that supplies were withheld consists only of evidence of requirements imposed by the supplier in respect of the time at which or the form in which payment was to be made for goods supplied.
I put down this Amendment as the result of an undertaking which I gave during the Committee proceedings about the onus of proof in Clause 4(4) of the Bill. The Amendment proposes to limit the operation of that subsection. Clause 4(4) deals with the onus of proof in proceedings for injunction or other relief against a supplier for contravening Clause 2, and what that Clause does is to make it unlawful for a supplier to withhold supplies from or discriminate against a dealer who is selling below the recommended resale price or against a dealer who has threatened to do this.
Clause 4(4) places the onus on the defendant supplier to show that he withheld supplies or discriminated for reasons not connected with resale price maintenance. What the Amendment does is to change this position in one case. This is the case where the supplier has discriminated by requiring the dealer to make payment on terms less favourable than those offered to similar dealers in similar circumstances, and the Amendment says that in this case Clause 4(4) is not to apply and there is to be presumption against the supplier. It will be for the plaintiff, whether the Crown or an individual dealer, to show that the alleged discrimination was on the ground that the dealer had sold or had threatened to sell below the recommended resale price.
I think that there are good reasons for distinguishing the case where the supplier is discriminating in terms of payment. We discussed this when dealing with the matter in Committee. There is always the possibility, as some of my hon. Friends pointed out, that the supplier himself may be in financial difficulties and may have to insist on immediate payment. By doing so under the Clause as originally drafted he renders himself vulnerable to an action by the dealer. As the Clause

is at present drafted he could not succeed in the proceedings without revealing that he was in financial difficulties and this would put him at a disadvantage. On the other hand, the reason for insisting on early payment could be that he has confidential information to the effect that the dealer himself is near to bankruptcy, and the supplier will be merely protecting his own interests.
As we all know, none of these matters can be disclosed and yet the supplier would be faced with the threat of proceedings, and it is quite possible that he would find it difficult to prove that his real reason was the dealer's financial position. So that in either of these cases, though for different reasons, the supplier would not risk proceedings, as the onus of proof would be on him, because of his own position or the difficulty of proving the position of the dealer, so he would have no alternative but to offer the normal credit terms to the dealer.
I think that these two examples show that the terms of payment are different from the other terms with which the Clause is concerned, and I think that we are right in distinguishing them, as I gave an undertaking to do in Committee, and changing the onus of proof in such cases. I hope that the House will feel that the form of this Amendment meets the undertaking that I gave to the Committee and I think, therefore, that we are justified in amending the Bill in this respect. I commend the Amendment to the House.

Mr. W. Wells: We welcome the Amendment as being an improvement to the Bill, but, we must confess, with somewhat modified rapture. In the first place, we consider that there are a number of similar cases such as the one we have recently discussed in relation to new business which are, broadly speaking, analogous with these requirements as to payment, and for these reasons we think that the Amendment should have been cast in a somewhat wider form.
10.45 p.m.
We have an objection, not going to the root of the Amendment but on a matter of form of some little importance. We think that it would have been clearer and more convincing to deal with this type of Amendment as an Amendment to Clause 2 rather than as an Amendment to Clause 4. In other words, it


would have been better to provide that withholding in these circumstances would not be unlawful, as we were seeking to do for a somewhat different purpose in our Amendment No. 15, rather than dealing with this simply as a question of proof.
However, having made those observations, I think this is a great improvement in the Bill and we welcome it as such.

Mr. Peter Emery: There is one small matter which I think is causing some concern. While I entirely welcome this as being a major step forward and a general improvement with no alteration in the overall basis of the Bill, I should like to ask one question. Suppose that a supplier, because of his own judgment, cut off supplies in the belief that financial hardship was expected, and suppose that a case was then brought against him either by the Crown or, indeed, by the trader. Would it be sufficient as a defence for the supplier to be able to say, "This is purely my business judgment"?
At the moment, if somebody wishes to alter the terms of credit which may be outstanding, or to change from credit to a cash transaction, this is a matter of business judgment on which he cannot be questioned. If he cuts off supplies and a case is brought against him—I realise this is an extreme case, but it is a possibility—is it enough for him to say in his defence, "This is my business judgment"? It may be based on inside information or on information which he would not want to reveal, or perhaps would not be able to reveal, in court. The only defence would then be, "This is a judgment which I made in my normal business operations, and this must be my defence." I should very much like an answer to this small but specific point.

Mr. M. Foot: I think this Amendment is an improvement, but I would like the right hon. Gentleman to clear up one point which has mystified me.
Reference has been made to whether the Bill in any form at all could apply to newsagents and to the sale of newspapers. When I referred to this matter in a debate at the end of the Committee proceedings, the right hon. Gentleman dismissed what I said by suggesting that there could not be any application to

newspapers because newspapers are not covered by resale price maintenance and that, therefore, if resale price maintenance were abolished, it would not make any difference. I said that I had mentioned the matter only because the right hon. Gentleman himself had raised the question precisely when we were discussing this Clause, to subsection (4) of which this Amendment applies.
I would remind the right hon. Gentleman of what he said in the Committee proceedings on 21st April:
The hon. Member for Brightside mentioned, particularly, the sale of newspapers. The system of franchise in newspapers is well known. Everybody knows that certain people have rights in a certain town to sell news papers. It is a well-established position. Anyone who thought of trying to blackmail or to bring any action would think very carefully before proposing action in such a case when the system is well established.
This system has been much criticised because new people find it very difficult to obtain a franchise. This is the other aspect of the balance. I should have thought that the Committee agreed that it is not right that a newcomer to the trade should be unable to get supplies from anywhere, because the balance would then be in the wrong direction and the onus would be placed entirely on him. This aspect must be taken into account in the circumstances of subsection (4)."—[OFFICIAL REPORT, 21st April, 1964; Vol. 693, c. 1174.]
I think that it was perfectly legitimate for any member of the Committee to draw the deduction from these words by the right hon. Gentleman that in certain circumstances this Bill could affect the sale of newspapers. It could affect the sale in the sense that if certain newsagents in certain areas started to sell below the recommended price and then newspaper proprietors or wholesalers started to withhold supplies on that account, the whole operation of the Bill would be applied to the circumstances. The newspaper proprietors or the wholesalers would have to invoke the operation of this Bill in order to protect themselves. They would think themselves justified in seeking protection.
Therefore, it was legitimate for us to say that the Bill in certain circumstances might apply to the newspaper trade. How is that affected by the Amendment? The right hon. Gentleman told us in Committee that he was trying to preserve the balance and, included in his attempt to preserve it, he was trying to insist that wholesalers or newspaper proprietors would be compelled in cer-


tain circumstances to sell to newcomers in the trade.
I am not saying that this is necessarily wrong, but I am saying that it ought to be clear. Certainly it is quite improper—unless the right hon. Gentleman can persuade me differently—for him to suggest that the provisions of the Bill will never apply to the newspaper industry or the newspaper trade. It may be that the newspaper trade will be able to protect its methods of selling only by invoking the provisions of the Bill. Therefore, it must be concerned not only with this Clause and this subsection but with the general provisions and criteria of the Bill as a whole. I hope that the right hon. Gentleman will explain a bit more fully what he meant when he said that in Committee in reply to the hon. Member for Sheffield, Brightside (Mr. Winterbottom).

Mr. Graham Page: I am extremely grateful to the Secretary of State for putting down this Amendment in response to an undertaking I pressed him to give in Committee. The Amendment will result in the position that any presumption that a withholding is unlawful will arise if the refusal is the refusal of credit terms.
It may be a little ungracious of me to point out the shortcomings of this Amendment but I think that this should be put on record. Let me take an example. The supplier might say to the dealer "You are undercutting. I think you will ruin yourself doing it. I do not intend to be a creditor in your bankruptcy. If I supply you with goods I want cash." Turning back to an Amendment which was previously discussed and made part of the Bill, a supplier would have to show that his reasons for refusing credit stood alone and were not dependent on the fact that the dealer was undercutting. I do not think that in the sort of example I gave he could say that they stood alone, so in that case there would be a refusal of credit which would be an unlawful withholding. I think that is unfortunate. I would have hoped that an Amendment could have been produced which would have made the refusal of credit withholding which was perfectly justifiable. I appreciate, however, that such an Amendment might have sabotaged my

right hon. Friend's Bill too much, and I am thankful for what he has given.

Mr. Heath: Perhaps I may deal with the points which have been raised. The question of my hon. Friend the Member for Reading (Mr. Peter Emery) was whether the supplier would be able to say that he acted on his business judgment alone. The position, surely, is that when the discrimination consists of insisting upon a cash payment or less favourable credit terms, the onus will always be on the dealer or the Crown to show that the discrimination is on the ground of the dealer selling below the recommended price.
Clearly, if the onus is on the dealer to show this point, my hon. Friend's question does not arise. If he considers this, my hon. Friend will realise that with the change of onus, the dealer has to show that the supplier had withheld on the grounds that the dealer was selling below the recommended price. He has to prove this point. Therefore, my hon. Friend's question does not arise. If the ground was the financial instability of the dealer, the dealer himself could not discharge the onus of proof. In either case, therefore, my hon. Friend's question is dealt with by changing the onus and the point about the supplier saying that it is his business judgment alone does not arise.
In reply to the hon. Member for Ebbw Vale (Mr. M. Foot), I am sorry if there has been misunderstanding, but I do not think that the difference between us is very great. It arose, probably, because the hon. Member for Sheffield, Brightside (Mr. Winterbottom) was discussing newspapers and whether suppliers would be forced to supply particular people. I said that one of the grounds which, we had suggested, could be put forward was that a supplier had sufficient dealers or had a fixed number in a certain town and did not wish to increase their number. I emphasised that with newspapers, with which there is a well-established franchise system, we had, perhaps, a prominent example in which it could be shown that the system of dealers was arranged, fixed and flourishing and that, therefore, there should not be any difficulty about showing this.
I went on to the separate point that a newcomer to the trade should not be prevented from getting supplies only on


grounds of selling below the recommended price, a question which the House has discussed on an earlier Amendment tonight and which I need not cover again. I am sorry that there has been misunderstanding, but I do not think that there was any difference of substance on the point with which we were dealing.
I am grateful to my hon. Friend the Member for Crosby (Mr. Graham Page) for the views he has expressed. I recognise the point which he has made, but I am grateful that he realises that we did not want to change the Bill in that respect and that we have tried to meet the point by the Amendment.
The hon. and learned Member for Walsall, North (Mr. W. Wells) dealt with the question of putting this provision in Clause 2. He appreciates, I think, the reasons why we wanted to change the onus under Clause 4 rather than exclude it as a ground under Clause 2. I am grateful that, although he would have liked us to do it in another way, the hon. and learned Member recognises the importance of the change which we are making.

Amendment agreed to.

Clause 5.—(POWER OF COURT TO EXEMPT CLASSES OF GOODS.)

Mr. Heath: I beg to move Amendment No. 23, in page 5, line 26, at the end, to insert:
(c) the prices at which the goods are sold by retail would in general and in the long run be increased to the detriment of the public as such consumers or users; or.
This Amendment will provide a new gateway to Clause 5 and, again, it is put down as the result of an undertaking which I gave in Committee. It will allow it to be argued that the ending of resale price maintenence would lead to higher prices. In Committee, a number of hon. Members were anxious about the absence of such a gateway.
11.0 p.m.
In particular, it was argued by the hon. Member for Ebbw Vale (Mr. M. Foot) and my hon. Friend the Member for Hertford (Lord Balniel) that this was one of the heads under which the Restrictive Practices Court had found in favour of the Net Book Agreement but that it was not in the Bill as originally drafted, and I undertook to table an

Amendment. The Amendment will permit the respondents to argue that without resale price maintenance prices would in general and in the long run be increased to the detriment of the public.
There was an Amendment with a similar object before the Committee. That referred to prices being on the average higher. This gateway has been phrased on the basis of the judgment in the net book agreement case, and it takes the two specific points made by the Court on that occasion. What the Restrictive Practices Court said in its judgment was:
To speak of the average price of books does not help.
That was the phrase used in the earlier Amendment. We had not followed that. The conclusion of the Court was that "prices generally would rise". This is the phrase that we have embodied in the gateway.
The other point that the Court made was:
It is the results which would ensue in the long run with which we are principally concerned, not those which might for a short time only follow the determination of the agreement.
So by using the phrases "in general" and "in the long run" the Amendment is, I think the House will agree, in accordance with the finding of the Court.
When we discussed this previously the question of the short-term and the long-term effect of prices was raised by my hon. Friends the Members for Gillingham (Mr. Burden) and Bournemouth, West (Sir J. Eden). My hon. Friend the Member for Bournemouth, West suggested that there could be a case in which prices began by going up and were subsequently reduced. My hon. Friend the Member for Gillingham suggested exactly the reverse, that they might first go down and then go up. I think that the phrasing of the Amendment deals with both cases in concentrating on the long-term effect which the Court will have to look at when it is considering whether a case comes within this gateway.
I expressed my view previously that I would have thought that there would only rarely be cases in which the ending of resale price maintenance could lead


to increased prices, but I also readily acknowledged that this was one of the three grounds on which the Court based its judgment in the net book agreement case. So I have tabled this Amendment to provide for what I think will be the exceptional case. It allows for this argument to be put before the Court, about the progress of prices in general and in the long run.
I hope that the House will feel that I have fully met the undertaking which I gave in Committee and that this is appropriate phrasing for such a gateway, and I commend the Amendment to the House.

Mr. R. Gresham Cooke: I express gratitude to my right hon. Friend for tabling this Amendment in response to the request of a number of my hon. Friends. It should be put on record that too often it has been said in the Press that the Government have not made any concessions to back benchers. The Government have made three or four Amendments in Clauses 2, 5 and 7 in which I was very much interested.
As my right hon. Friend said, there seem to be two ways of looking at what might happen if resale price maintenance were abolished. I have discussed this with persons in the motor industry and persons in the radio and electrical trades, and there seem to be two opposing views. One view is that the small man with his smaller overheads will cut prices to a great extent and thereby things will be very much cheaper. But there is also the view that in certain areas the large distributive firms will gobble up all the smaller firms in the neighbourhood, will hold practically a monopoly and will put prices up, and we ought to recognise that.
I wish to draw to my right hon. Friend's attention a point which was drawn to my attention only last night—that in certain complicated trades, such as radio, electrical products and motor cars, the price of after-sales service will be completely free if r.p.m. is abolished, and there may be a tendency by some dealers to cut their margins to sell goods at a very low price and to upgrade the price of their after-sales service. That has happened abroad. I am told that if

one is motoring through the deserts of America and one's fan belt breaks 100 miles from a town, and if one goes to a dealer to have it mended, he may say that the price is 100 dollars. If one turns to the service handbook and points out that the price for General Motors is only 2 dollars 50 cents, he may reply, "If you want it for 2 dollars 50 cents. you must drive 100 miles to the next town."
There is a possibility, particularly at week-ends in this country, that service charges may be put up, just as greengrocers put up the price of vegetables on a Saturday. My right hon. Friend might consider whether in another place he could include after-sales services in the Amendment as well as goods in case the price of these services rose to the detriment of the public, which nobody wants. Having said that, I commend the Amendment and thank my right hon. Friend for putting it in the Bill.

Mr. A. E. P. Duffy: Hon. Members opposite should hesitate before they continue to congratulate the Secretary of State on what they regard as a concession. It is true that in Committee he gave an undertaking that he would introduce such an Amendment, and I welcome it on that account. I recognise that the crux of the Bill lies in this Clause and in the number of exemptions from abolition which it provides. I want those exemptions to be reduced to a minimum to obviate the continued weakening of the Bill.
But I need not have worried, because I do not regard this Amendment as a concession and certainly not as a gateway, as the Secretary of State described it. I supported my hon. Friend the Member for Ebbw Vale (Mr. M. Foot) in Committee when I said that I was prepared to make an exception in respect of the net book agreement, but I do not think that I could say with certainty that the net book agreement will get through this gateway. The right hon. Gentleman admits that theoretically there is a case, and so do I. It would not be difficult for many of us to see the theoretical possibility of prices rising
in general and in the long run.
Can you imagine the play, Mr. Speaker, that the economists will make with the Court when they are trying


to prove that prices will in general and in the long run rise to the detriment of the public? Does any hon. Member believe that if prices are no longer fixed, they will tend to rise? Is there any hon. Member who is prepared to say that with conviction and defend it? Is there any hon. Member who is prepared to say that it is inevitable that prices will rise in the long run if prices are no longer fixed?

Mr. Maxwell-Hyslop: If the hon. Gentleman had been present when this matter was debated in Committee, he would have heard arguments deployed to that effect.

Mr. Duffy: I will concede some of the arguments. I will concede that it is possible that increased competition will so reduce the number of retailers or suppliers that monopolies will be created. I will concede that fluctuations in retailers' demands, created by their greater reluctance to hold stocks, will push up manufacturers' costs and so increase prices. I will not weary the House with a list of theoretical possibilities, but they are only theoretical. When we return to firm ground, we must recognise that in the long run when prices are no longer fixed they will not tend to rise and that, moreover, this will be very difficult to prove.
The significance of the Amendment lies, unhappily, in a weakening of the Bill. Arguments of this kind before the Court will delay the application of the Bill and will encourage applications to the Court simply in order to protract proceedings. The Amendment will be more important in its indirect than in its direct effects. I do not regard it as a concession, but I regret it, for I regard it as a weakening of the application of the Bill.

Mr. Maxwell-Hyslop: I should like briefly to welcome the Amendment, which removes one of the major defects in the Bill as it was introduced. I am glad that my right hon. Friend has introduced it in this form—a form which already has a definitive existence in the record of the Restrictive Practices Court. My right hon. Friend does not believe that it will often be used. I believe that it will be used more often than he does. It does not matter in the

least which of us is right when the Amendment is made. There is no need whatever to rehearse the reasons for believing it to be necessary, for that was done fully in Committee. I regard the Amendment as having removed one of the great dangers inherent in the Bill, and I therefore welcome it thoroughly.

Mr. Cole: This gateway may well prove to be the most important of all, and I am grateful to my right hon. Friend for including it. I support what my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) said about services in this regard. He mentioned a number of trades in which after-sales services are sometimes all important and in which one might sacrifice a little on the capital cost in order not to lose for many months afterwards, for instance, with a year's guarantee. This is important to at least one trade where there is resale price maintenance and where after-sales services are of a very high character. I hope that my right hon. Friend will consider introducing in another place an Amendment to provide a gateway not only when prices go up with the abolition of resale price maintenance, but, equally, when the cost of servicing may rise. That should be an additional part of the gateway.

Mr. Jay: I am a little surprised that hon. Members opposite should think that they have won such a great victory. The Secretary of State told us earlier that he did not believe that this would ever happen except in very rare cases and that nobody would be able to prove that the abolition of resale price maintenance would raise prices. If that is his view, he has inserted into the Bill something which does no harm, on that assumption, but which he expects to have very little effect and very little substance.
I find it difficult to see how the abolition of resale price maintenance, except by the operation of one of the processes already covered in the existing gateways, such as a reduction in the number of retail outlets, could lead to a rise in prices in the long run. If that is so, and that is the right hon. Gentleman's view, although he has done no harm, he has not really made a concession of any material substance and this is a rather


Pyrrhic victory for hon. Members opposite.

Amendment agreed to.

11.15 p.m.

Mr. Heath: I beg to move,
That further consideration of the Bill, as amended, be now adjourned.
We have made considerable progress today, and I think we have reached that position where it is not unreasonable to assume that we shall be able to complete the Report stage and Third Reading tomorrow.

Question put and agreed to.

Bill, as amended, to be further considered Tomorrow.

Orders of the Day — WAYS AND MEANS

Considered in Committee.

[Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

INCOME TAX (CASE VIII OF SCHEDULE D)

Resolved,
That it is expedient to authorise charges to income tax arising from amendments of Chapter II of Part II of the Finance Act 1963 (taxation of rents, etc.) relating to payments made or deemed to be made for any period in which a sale of the property, or some other transaction or event, takes place.—[Mr. Green.]

Resolution to be reported.

Report to be received Tomorrow;

Committee to sit again Tomorrow.

Orders of the Day — UGANDA (GIFT OF A MACE)

The Lord Privy Seal (Mr. Selwyn Lloyd): I beg to move,
That Mr. David Renton, Mr. Martin Maddan, Mr. Arthur Woodburn and Mr. Brian O'Malley have leave of absence to present, on behalf of this House, a Mace to the National Assembly of Uganda.
A fortnight ago I moved the traditional Prayer to Her Majesty in the matter of presenting a Mace to the National Assembly of Uganda. The House may wish to know that the composition of the delegation to perform this pleasant task has now been arranged in consultation with you, Mr. Speaker. It will consist of Mr. David Renton, Mr. Martin Maddan, Mr. Arthur Woodburn and Mr. Brian O'Malley, who will be accompanied

by Mr. K. R. Mackenzie, Clerk of Public Bills. The Mace, which is of an interesting and unusual design, is on display in the Library.

Question put and agreed to.

Orders of the Day — POLITICAL SUBSCRIPTIONS

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Finlay.]

11.22 p.m.

Mr. John Diamond: The reason I have the good fortune to catch your eye, Mr. Speaker, is because the hon. Member for Grimsby (Mr. Crosland) is unwell and not able to be in his place. I think it would be proper for me to say how much we regret that he is not here and that he is unwell.
The subject I desire to raise is quasi-political subscriptions included in Government contracts.

Mr. Speaker: May I ask the hon. Member whether the Minister responsible has had notice?

Mr. Diamond: Yes, Mr. Speaker, and he is good enough to be on the Front Bench to listen to what I have to say.
I am not, of course, dealing with the right of an individual out of his taxed income to use his money for whatever purpose he may desire, political or otherwise. I am merely dealing with the question of the right of organisations, mainly companies, to devote some of their funds without the consent of the people to whom the funds ultimately belong and to use these funds for the furtherance of political and quasi-political objectives.
Political objectives would, of course, be payments direct to political parties, and quasi-political objectives would be payments to the sort of front organisations with which we are now all familiar. I might list the four best known. They are Aims of Industry, the Economic League, British United Industrialists Limited, and the Enterprise Association, with which two hon. Gentlemen opposite are closely connected.
Moneys paid to these front organisations are used either in support of the Conservative Party, or are paid direct to it. For example, at the last election


British United Industrialists Limited devoted 90 per cent. of the sum which it collected to the Conservative Party, 5 per cent. to the National Liberals, and 5 per cent. to Aims of Industry.
The way in which the Government have responsibility in this matter is that any contracts which are paid for out of taxpayers' funds, and which include in the constitution of the price of the goods delivered subscriptions of this kind, are contracts under which the Government are diverting public money for political purposes as to 100 per cent. That would arise not only in Government contracts, but, less directly, in Government subsidies.
The second broad category from the Inland Revenue point of view, items which are not properly allowable for tax purposes but which, by one means or another, are treated as allowable, do in fact attract a relief of about 50 per cent. in Tax and Profits Tax, and therefore we can say broadly that ½ per cent. of these payments made in the circumstances which I have described would again be payments by the general taxpayer for the benefit of the Conservative Party and associated front organisations.
The evidence which I produce of the way things are going wrong is first a Question to the Minister of Aviation on 25th March when I asked him the position with regard to overhead expenses on the Bloodhound contract for which Ferranti Limited were the contractors. I asked whether, in calculating those overhead expenses, that is to say, in calculating the price which the Government were paying with taxpayers' money, subscriptions to Aims of Industry and similar bodies were disallowed. The answer was: "No, Sir." There was some explanation, and at the end the relevant sentence was:
In assessing this figure, we do not normally take account of individual items which, as in this case, would be too small to affect the final percentage."—[OFFICIAL REPORT, 25th March. 1964; Vol. 692, c. 434]
One has to do one's best in calculating what size these items might be. The figure which would not affect the final percentage would be a figure of less than 1 per cent., or to be on the safe side, a figure of less than ½ per cent., because ¾ per cent. might be held to go to the nearest digit, and therefore it is

safest and fairest to assume a figure of less than ½ per cent. But, as we know from the Report of the Public Accounts Committee, the overheads for that contract were about £3 million, and ½ per cent. of that is £15,000. One can say, therefore, that a figure up to £15,000 might well have been paid by Ferranti Limited as a contribution to Aims of Industry, and that figure might be included in the overheads paid for by the Government out of taxpayers' funds for political purposes, which I am sure no respectable Government would wish to do.
But that is only one item which has recently come to light. There must be many others. It is difficult to find out what these might total. I understand that total research and development expenditure, which is based on what are shortly called cost-plus contracts, and where any expenditure of this kind if not disallowed would be added to the price, amounts to £434 million for the current year, and ½ per cent. of that would be about £2 million. But production and research in the Defence budget amount to £867 million. That is to say, something in addition to research and development has been added for production.
If one takes half the production just as a figure representative of those items which are ordered again either on a cost-plus contract or a contract based on technical costs, one arrives at an answer of an additional £1 million, or a total of £3 million all told, which, according to the Government's own answer and the Government's own formula, would be included in Government contracts, paid for by the taxpayer and diverted to the uses of the Conservative Party and the front organisations that I have listed.
This is not an unreasonable figure, because when we look at it the other way we find that a figure of £3 million is required. We find that the Conservative Central Office has a budget of about £1 million a year, at present, and that in the last General Election approximately £2 million was spent by the Conservative Party on its publicity campaign in the period prior to the General Election. That makes a total of £3 million, and it might therefore very well be that the two figures roughly coincide.
I say that this might well be the case, because we know that the £3 million spent in this way does not come from private resources. We have been told by the Leader of the House—not in his capacity as Leader of the House but as an investigator of his party's organization—that these private subscriptions run at about £1,000 only. Therefore, the rest of the money must come out of companies and organisations of one sort or another, and it seems that there is a good deal of support for the contention that the Government are collecting from the taxpayer £3 million and diverting it, through Government contracts, to the Conservative Party and its front organisations.
Then there is the question of subsidies. The Government calculates the subsidies and gives part of the subsidies to firms which, in turn, use part of this money for political purposes. We get to the situation in which 100 per cent. is diverted. We know of the famous case of Fison's, which received a fertiliser subsidy of about £30 million, and which contributed substantially at the recent by-election—to the tune of £2,320—to various Conservative associations which it wished to support. That is my complaint about the Government's handling of public money for political purposes as to 100 per cent.
Now I turn to the question of taxation, where the allowance of items which should properly be disallowed has the effect of diverting 50 per cent. of the money so paid out of the taxpayer's pocket into the hands of these political bodies. This can be done in a variety of ways. First, it can be done by a deliberate mis-statement. If the inspector of taxes is told everything and the company has a clean sheet, everything is all right, but there can be a deliberate mis-statement.
We had a case of a deliberate misstatement, with which I will not trouble the Financial Secretary, in the famous case of Fison's, where it was denied three times running that any payment had been made to these Conservative associations, both on behalf of the company and on behalf of the agent himself—and then, ultimately, the chairman announced at the annual general meeting that £2,320 had been paid. If those

same officers who denied in the first place that any payments had been made had made similar denials to the inspector of taxes, these moneys would have escaped tax.
Then there is the question of secrecy. I know for a fact that, certainly until recently, a well-known City firm—it would be wrong to give the name—adopted the practice, each year, of deciding that a sum of money—in the old days a modest sum of £2,000; what it is now I do not know—should be devoted by the chairman for such purposes as he might decide. The chairman uses the money as a donation to the Conservative Party. That is one example I know of as a fact, but I do not know how many times it is repeated. If one gets that kind of secrecy, how does one know that the inspector of taxes is made aware of the circumstances? If he was made aware of them he would, of course, disallow the item for tax purposes.
Then there are services. If a company pays for services that are properly connected with the furtherance of its business that would be a proper expense for Income Tax purposes, but one knows that many of these organisations are concerned exclusively with anti-nationalisation measures. One knows that some of the directors are directors of large companies like Hawker-Siddeley, a firm which gets most, or a large part, of its business from nationalised industries such as the nationalised airlines. It is difficult to think that it is in the best interests of Hawker-Siddeley to be known to be contributing to an an organisation that is out to do down nationalised bodies such as the airlines which provide the company with the majority of its business. I doubt, therefore, whether, if this were fully disclosed, it would be held to be proper expenditure of the kind that is allowable for tax purposes.
There is the general question of advertising. One hears a lot about advertising, and in the accounts of companies it is given the simple title of "advertising". It could be advertising for perfectly normal and proper purposes; it could be pure anti-nationalisation advertising, which is purely political and cannot be held to be anything else in the case of those large steel companies which depend very largely for their business on orders for steel from


nationalised bodies such as the railways. To what extent are those items fully probed to make sure that the Revenue is protected?
The largest item in this category is what I might call "so-called advertising." The local Conservative Party has a fête and a brochure is issued. A page costs £100 or £250, dependent on what a firm feels disposed to pay. The sum is paid, and put down in the firm's books as "advertising." The total brochure costs 8s. 4½d to produce, or something like that, and the balance goes as profit of the fête to the Conservative Association which is running it. The majority of it comes from these company subscriptions, as to which one-half improperly comes out of the pocket of the taxpayer for the benefit of the party concerned.
All these matters arise because of the way in which they are described and the impossibility, in my view, of the inspectors of taxes, however intent they are on seeing that there is fair play, being able to devote the time and the detailed attention to ferreting out each item, especially when there is secrecy. So the real question is how we can protect the Revenue. I am sure that the Financial Secretary is as concerned as is anyone else to do see that these items are brought to light, because without light, as he will appreciate, things begin to get somewhat mouldy, and even start to smell.

11.33 p.m.

The Financial Secretary to the Treasury (Mr. Alan Green): I admit to some difficulty in answering the hon. Member for Gloucester (Mr. Diamond) for one particular reason that I am sure he will appreciate. Practically everything he has said tonight has been on a strictly hypothetical basis. Sentence after sentence started with the sort of phrase—"might well have been," "could possibly have been," "the probability is," and so on. I therefore fear that he has not really given me anything specific to answer. I am sorry that he has not—but he has not.
The hon. Gentleman, as a practising accountant, knows probably better than I—certainly as well as I—the rules of the Inland Revenue. If there are specific cases that he can substantiate and bring

to my notice, I will look into them. It would, of course, be open to the taxpayers concerned to contest the cases, as again the hon. Gentleman knows perfectly well.
If a taxpayer believes that the expense for which he is claiming an allowance was incurred wholly and exclusively for the purposes of his business, the taxpayer, just like the inspector, though from opposite ends, has a perfect right to take the matter to the court if he so wishes. I have to tell the hon. Member first, therefore, that I am not a judge. I am not standing at the Dispatch Box prepared to act or speak like one, and I know that the hon. Member will not expect me to do that. If there was a single case to be decided I would expect the Inland Revenue to take it to the courts. As the hon. Member knows, the inspector has perfectly clear guidance and if the taxpayer concerned wishes to contest it he will no doubt do so. If the Inspector disallows a legitimate expense contrary to law, the taxpayer can take the Revenue to court. This in fact has happened.
This is the situation in every one of the possibilities which the hon. Member has mentioned. They are only possibilities, as the hon. Member has acknowledged in the language he has used, though we must check that from Hansard tomorrow. If all these possibilities which the hon. Member has raised are justiciable, as I believe them to be, a case should be brought either by the Inland Revenue and contested by the taxpayer, or conversely by the taxpayer and contested by the Revenue, and in the courts a proper decision can be made. This is the first part of the answer that I can give to the hon. Member.
The hon. Member raised the question of the Ferranti case and he received an answer from my right hon. Friend the Minister of Aviation explaining why a particular item for the purposes of calculating the contract price had been disregarded. It is making a little too much of it to assume that the item was of such and such a size on a percentage basis when the hon. Member either knows what it was or cannot know what it was. To take ½ per cent. and apply it to a contract figure of £3 million and turn it into £15,000 and make the connection between that and whatever Ferranti Limited may or may not have given to a par-


titular institution or, to use the hon. Member's terms, a quasi-political body, and to say that it is a reasonable presumption that the sum was £15,000—to argue in that sort of way by confusing the particular with the general—is simply to make a statement that arouses a great deal of suspicion. It is to make it without having the means of verifying whether the attack is justified or not. I do not know what the sum was at this moment in time.
I suggest to the hon. Member that if he feels so strongly about this he should take the matter outside. It is the proper thing for him to do. I respect very much his knowledge of accountancy procedure and, I believe, his substantial practice of that procedure. These companies employ auditors, and the bigger the companies are the more we can be absolutely certain that the auditors will be highly respectable and proficient auditors of the hon. Member's standing or its equivalent. Therefore, we have the auditors themselves, with their professional standing, and then the inspector of taxes and, finally, in the case of dispute, the courts. I should have thought that this was a perfectly reasonable process, because we have laid down what expenses in general are allowable—

Mr. Diamond: The hon. Gentleman is missing the point in dealing with the Ferranti case. It has nothing to do with auditors or tax inspectors. It is merely concerned with the decision to allow expenses of that kind. If the figure which I gave is not the right figure, why does the hon. Gentleman not tell the House what it is? He has paid out the money.

Mr. Green: The hon. Member, with the greatest respect, is confusing two things. He is saying that if a company—and he instanced Hawker-Siddeley in the same sort of context—is concerned with Government contracts there apparently should be some special rule in dealing with allowable expenses. If that is not what the hon. Member's argument is, I do not know what he means. But in that case, of course, he would know from his own experience again that he is on to something which is really almost impossible. Companies such as

Ferranti or Hawker-Siddeley, which take Government contracts also take private business contracts as well. How one entirely separates the profit legitimately earned on a Government contract from the profit legitimately earned on a civil contract in the final accounts of the firm which embraces both these activities, I am really not at all clear.
Why one should apply different rules of allowable expense to a contract that results in a profit, or, indeed, in a loss, because it is on Government account from the expenses allowed on some other account is something on which I am not at all clear. I hope that the hon. Gentleman is not suggesting that we should do that.

Mr. Diamond: I am sorry to interrupt the hon. Gentleman again, but, of course, I am not dealing with profits or losses at all. We are talking about the expenses incurred in carrying out this work and the Government's reimbursement of those expenses. The Government say that they have reimbursed all these expenses, including subscriptions to Aims of Industry.

Mr. Green: My right hon. Friend the Minister for Aviation gave the reason why this particular item was not struck out. The reason he gave was that it was so small that it was not worth bothering with. I am not particularly defending or attacking the answer given. But this is a separate issue.
What the hon. Gentleman has been seeking to do, if I understood him correctly, is to differentiate between the forms of expenses allowed in cases where firms took Government contracts and the expenses allowed to firms which did not. That is quite wrong. The rule on expenses is well known to the hon. Gentleman and to every Inspector of Taxes. I believe that it is well known to every professional accountant and auditor who acts for companies that the expenses must be shown to have been incurred wholly and exclusively for the purposes of the trade or profession.
If I have not quoted the position absolutely exactly, I think that I am extremely near to having done so. This is a matter of professional duty of auditors in the first place, and, as far as I know, they honourably carry out that duty in every case. The inspector of


taxes, of course, can challenge any expenses if he wishes to do so. I have no doubt that on occasions something gets through. That is human nature. If the inspector challenges, there may be a court case, as happened, I think, with Tate and Lyle. It might, of course, happen again on the nationalisation issue which the hon. Gentleman raised.
What I am saying is that the basis of the law is perfectly clear and well understood by accountants, companies and inspectors of taxes, and it is applied. If there are cases in which there is doubt the proper place to take them is to the courts and for the courts to make the

judgment and not for me to do so. This would be for me to exceed my duty.
I really cannot accept from the hon. Gentleman here and now the series of hypothetical propositions which he has put to me tonight. If he can put to me particular cases and produce all the facts, I will willingly do my level best to see that the Revenue is further and consistently protected against malpractices in the use of expense allowances by whoever and however they may be followed.

Question put and agreed to.

Adjourned accordingly at a quarter to Twelve o'clock.